1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
THURSDAY, APRIL 14, 1994
Afternoon Sitting
Volume 14, Number 5
[ Page 9991 ]
The House met at 2:10 p.m.
J. Beattie: As many members will know, last year the city of Penticton was chosen as the number one place to live in Canada. In the gallery this afternoon is the mayor of Penticton, Mayor Jake Kimberley, who is down here working with ministers and others in government to ensure that Penticton stays that way. He's accompanied by the city administrator, Tim Wood. They're sitting behind me in the gallery, and I'd ask the House to make them welcome.
N. Lortie: I have the pleasure to introduce approximately 50 grade 10 students from Burnsview secondary school in the centre of my riding of North Delta. They are accompanied by their teacher, Mr. Westlake. Would the House please make them welcome.
V. Anderson: I would ask the House to help make welcome 70 students from Sir Winston Churchill Secondary School in the Vancouver-Langara riding, with their teacher, Mr. Picard. Please make them welcome.
F. Randall: I notice in the gallery this afternoon Mr. Graeme Roberts, who is the chair of the Public Service Commission. I was able to spend about three and a half years with him on that commission. Would the House please make him welcome.
Hon. M. Harcourt: I'd like members of the House to give a very warm welcome to a pioneer from the Qualicum and Parksville area and the father of Dennis Moore, who is a CHEK-TV cameraman. He is now living in Victoria and is watching the proceedings very avidly. Would you give a very warm welcome to Jack Moore.
J. Sawicki: From time to time members from all sides of the House introduce our own interns, who do so much work for all of us. Today an intern from Ottawa is visiting here. I'd like the House to welcome Janice Oliver.
T. Perry: In the gallery are representatives of the inter-denominational health care association, who are here to meet later this afternoon with the Minister of Health: Howard Johnson, Jim McPherson, Maureen Harrison, Michael Crean, Gerry Herkel and Michael Pontus. Also in the gallery from the great riding of Vancouver-Little Mountain and the Louis Brier Jewish Home for the Aged is Mrs. Rita Akselrod. I wonder if members would join me in please making them welcome.
I have one other introduction to make today which gives me particular pride and pleasure. In the gallery with us is an employee of the former Minister of Advanced Education, Training and Technology who now works for the Minister of Municipal Affairs and is a very good friend of mine, Lynn Siddaway of Vancouver. She was one of the pioneers of the translation service for deaf people which was recently instated in this House. She was instrumental in helping arrange the original episode of interpretation back in 1991. I'd invite all members to give her a very special welcome to this House -- in an untraditional manner, if anyone would feel comfortable in joining me.
A. Hagen: I'd like to welcome Michael Crean, who was the chair of the board of St. Mary's Hospital in my riding, and also ask you to help me in welcoming Dan Donnelly, a business person from New Westminster who is in the precincts today.
F. Gingell: In the gallery today is a friendly face familiar to many of us, Mr. Bill Clancey. Mr. Clancey hopes that this House will rise reasonably soon so that he can get back to trying to take my money at bridge on Tuesday nights. Please make him welcome.
[2:15]
REPORT ON PERRAULT CASE
J. Dalton: My question is for the Attorney General. The report on the escape of Danny Perrault was completed in October of last year. The report raises far more questions than it provides answers. Why did the Attorney General come into this House yesterday with no game plan to restore public confidence in the corrections system?
Hon. C. Gabelmann: It's my intention to come in with such a game plan in the very near future.
The Speaker: Supplementary, hon. member.
J. Dalton: This again to the Attorney General. We certainly look forward to whatever that may be and whenever it may be. The minister said in this chamber yesterday that people should be allowed to read the report before they raise concerns and before he will address them. Well, we've read the report and we have many more concerns. Why wasn't the Attorney General prepared to address these issues yesterday?
Hon. C. Gabelmann: My comments yesterday in respect of the report related to the circumstances under which Mr. Perrault was classified in the decision in respect of New Haven, and also to the procedures now in place that will hopefully prevent that kind of incident from ever happening again.
That was the comment I was making at the time. I think there are broader questions in respect of corrections that require careful scrutiny and assessment, and I intend to tell members of the House how I will proceed with that in the very near future.
J. Dalton: Again to the Attorney General. The minister said that as long as this report was confidential, nothing would be done. This is known as the Vander Zalm defence: as long as no one knows, nothing will be done about it. Well, now everyone knows. Will the minister today call for an independent public inquiry into the mess that his corrections system is in?
Hon. C. Gabelmann: I don't recall, in this context, ever saying that nothing would be done because the report couldn't be released. In fact, following the inspections and standards investigation into the circumstances, significant changes were made long before the release of the report yesterday.
M. de Jong: I also have before me the report tabled by the Attorney General on the Perrault matter. The Attorney General will know that paragraph two of the supplementary report dated October 15 refers to allegations of meddling and inappropriate conduct that were in the initial report dated October 6, 1993. Will the Attorney General tell this House
[ Page 9992 ]
what that initial report was referring to when it concluded that there had been meddling and inappropriate conduct?
Hon. C. Gabelmann: In order to give a full and precise answer to that question, I'll take it on notice.
The Speaker: The question is taken on notice.
The member has a new question?
M. de Jong: For reasons unknown to all but a few, including the Attorney General, the allegations contained in that subsequent report were deleted in their entirety from the initial report. Sadly, one is forced to conclude that the ministry is hiding allegations of meddling and inappropriate conduct on the part of ministerial staff. Why is the minister unwilling to commit these and other allegations to a full public inquiry?
Hon. C. Gabelmann: As I said before -- in estimates this morning and in the hallway -- I find it unfortunate that federal law requires that I delete some sections from the reports. I find that troubling, but I have no alternative but to obey the law. Secondly, the question in respect of an inquiry was answered about seven or eight times this morning between ten and noon, and once already this afternoon.
The Speaker: Final supplementary, hon. member.
M. de Jong: Unfortunately, the Attorney General chooses to hang his hat on a non-existent legal hook. The plot continues to thicken.
The Speaker: Question, hon. member.
M. de Jong: Will he now acknowledge the insufficiency of the report that he has tabled, and commit to a public, independent investigation so that British Columbians will know whether this was a serious error or something much worse than a serious error, representing a cover-up within his ministry?
Hon. C. Gabelmann: More than the most members of this House, the member for Matsqui should know the law to which I am referring and its contents. I assume that he can read that law the way most lawyers can, and apply it correctly, which it has been.
An Hon. Member: Which you have not done.
The Speaker: Order, please.
Hon. C. Gabelmann: That's all I have to say on that point.
With respect to the inquiry, I've answered that question before. And in respect of the suggestion that there is a cover-up, I can assure the member that I would not be party in any way to any cover-up.
ATTORNEY GENERAL'S ABILITY TO CONTINUE IN OFFICE
G. Wilson: My question is to the Premier, and I take no particular pleasure in asking this question today. In light of the necessity for the office of Attorney General to be seen to be at all times free from any influence or political indiscretion, does the Premier not believe -- in light of the admissions that were made by the Attorney General to this House yesterday, and in light of the appointment of a special prosecutor to investigate the actions of the Attorney General with respect to alleged false affidavits -- that it would be important for the Premier to request that the Attorney General step aside until the special prosecutor has fully reported out and exonerated the Attorney General from such charges?
Hon. M. Harcourt: The Attorney General made it clear when he spoke before the Legislature yesterday that he had forgotten some scribbled writing on the back of a briefing book, done during a meeting in June. When the matter was brought to his attention late last week, I think, it was a genuine memory lapse; it was something that he had not been aware of or that he had forgotten about. As soon as he discovered that, he corrected the record for a matter that is before the courts.
I have talked with the Attorney General about this matter, and it is my judgment that.... I did not ask for, nor did I receive a request for, a resignation. This matter is now before the special prosecutor, as is automatically done when any information is placed before a justice of the peace by an individual citizen.
The Speaker: Supplementary, hon. member.
G. Wilson: Supplementary to the Premier. Again, it is with no particular pleasure that I pursue this topic, because I have the utmost respect for the incumbent. In light of the fact that a special prosecutor is currently investigating the conduct of the Attorney General and the fact that the Attorney General continues, under the estimates process in this House, to speak on behalf of his ministry, does the Premier not agree that it would be appropriate, in terms of both the appearance to the public and parliamentary protocol for the Premier to request that the Attorney General step aside because of the matter of alleged false affidavits? Surely the matter of a false affidavit presented in court is of the gravest nature, and the senior law enforcement officer of the province, when under investigation, should surely step aside. Will the Premier now rethink his position and request that the Attorney General do so?
Hon. M. Harcourt: I discovered on Monday that this matter had occurred, and after being briefed and fully informed of the facts on Monday and Tuesday, I did meet with the Attorney General. It was my judgment, based upon what I heard from the Attorney General and the facts that I had my deputy investigate, that it was not necessary for the Attorney General to resign or step aside.
As members are aware, any citizen can lay an information about any cabinet minister, and that automatically goes to a special prosecutor. If the hon. member is saying that a cabinet minister should step aside or resign when they have an information before a justice of the peace and that is then referred to a special prosecutor -- I don't think that is necessary.
The Speaker: A final supplementary, hon. member.
G. Wilson: Again, to the Premier. This House witnessed swift action taken with regard to the former Minister of Forests when there were allegations of misconduct. Members of this House -- and, I believe, members of the public -- find it incredible, when a false affidavit by the Attorney General is discussed in this House and a special prosecutor is in fact investigating such a serious breach of legal protocol, that the Premier of this province would not
[ Page 9993 ]
take action and request the resignation. Can the Premier tell us at what point he will decide that he is going to act and take leadership on this question, so that the people of this province have every confidence in the office of the Attorney General being separate from any form of potential influence?
Hon. M. Harcourt: I think, in the case of the memory that the hon. member has about these matters, there were two other instances where a special prosecutor or an investigation occurred. One was with the Minister of Finance, where the same complainant who had laid the information with the Attorney General laid an information with the Minister of Finance, which automatically went to a special prosecutor. I'm sure the member would not suggest that every time that particular person or a citizen lays an information, the minister has to resign.
The difference is that here we have an allegation being investigated by a special prosecutor in regard to the Attorney General, whereas with the previous Minister of Forests we had a finding -- not an investigation, but a finding as a result� of an investigation by the conflicts commissioner -- that there had been a technical breach of the conflict laws. At the time, I think all members said that....
The Speaker: Thank you, Hon. Premier. Please conclude these remarks.
Hon. M. Harcourt: And on the basis of a finding, I took the appropriate action. Here we don't have a finding. We have an automatic review by a special prosecutor.
REPORT ON PERRAULT CASE
A. Warnke: I want to pose my first question for this session to the Attorney General. The allegations raised in the Perrault case are indeed very serious and include some of what has been discussed here: staff meddling, cover-up, favouritism. These words have been used. I think they shake the public confidence. And as the Attorney General put it: "If there remains public anxiety or concern, I will do something else, but I'm not sure what just yet." Will the Attorney General take the initiative and call for a full public inquiry? When will he put this into place?
Hon. C. Gabelmann: This is the third time in this question period that question has been put, and I haven't had cause in the preceding 15 minutes to have advanced my answer any further.
A. Warnke: Again to the Attorney General: in the last 15 minutes the Attorney General talked about how the federal law inhibits him from doing.... He also said he has not been a party to a cover-up and all the rest of it. But the real way to clear this is to put forward a full public inquiry. Otherwise, there will be an impression of a gathering stench. On this basis, and on the basis of the minister saying that he needs a full, thorough and complete exoneration, when will the Attorney General put forward a full public inquiry?
[2:30]
Hon. C. Gabelmann: If the member had listened during estimates this morning, he would have heard me talk about this topic for close to two hours with members of his own caucus. A public inquiry per se may not be the best recourse in this instance, because public inquiries can generally take a year and a half to two years to complete. I'm not interested in delaying a resolution of this matter for that length of time. Therefore I am considering a variety of other alternatives which may be more effective in getting this matter behind us. As soon as I am able to say what those decisions are, I will say so. And it will be in the very near future.
MINISTERIAL ACCOUNTABILITY
J. Weisgerber: My question is to the Premier. The Attorney General has filed a false affidavit and he's under criminal investigation for alleged perjury. The Minister of Finance has been personally implicated in the illegal release of confidential personal files by her top personnel officer.
The Speaker: Your question, please.
J. Weisgerber: The Minister of Health has handed over to a convicted sex offender....
The Speaker: Order, please. Your question, hon. member.
J. Weisgerber: My question to the Premier is: what does the Premier consider ministerial accountability? Do you have to be in jail before you get taken out of this cabinet?
Interjections.
The Speaker: The bell terminates question period, hon. members.
D. Mitchell: Mr. Speaker, I have given notice to the Chair of this point of privilege, as well as to the member affected.
Specifically, I wish to refer to the cloud hanging over the hon. Attorney General because of the action brought against him for filing a false affidavit. This very serious but unproved allegation demands that the Attorney General do the honourable thing and step aside while a special prosecutor investigates this very serious charge. Parliamentary tradition and, more specifically, precedent in this assembly dictates that the minister of the Crown must resign....
The Speaker: Order, please. Will the hon. member please take his seat.
Hon. G. Clark: There are ample forums for debating this. This is not a matter of privilege; this is an excuse for an independent member, who is having a hard time finding his place, to make a speech in the House.
The Speaker: In the Chair's view, the hon. member should be allowed to state his matter very briefly but not to enter into debate. The Speaker would suggest that the member conclude his remarks and allow the Chair to review his request.
D. Mitchell: I will tender, along with my point of privilege, a list of precedents from this assembly showing when cabinet ministers have resigned under similar circumstances, when allegations of impropriety had been made. I raise this matter as a point of privilege today because it affects the privileges we hold as members, both individually and collectively. We cannot sit here today, attempting to hold the government accountable in this Legislature, when the chief law officer of the province refuses to do the honourable thing and step aside while an investigation by the special prosecutor is being completed. It is my view that the Attorney General's refusal to step aside is
[ Page 9994 ]
a breach of the parliamentary privileges of the House and as such should be referred to a special committee of privilege for a full review.
I would remind all hon. members of the high standards previously set in this House. On April 3, 1978, the Premier of the day, Mr. Bennett....
The Speaker: Order, hon. member. The hon. member is entering into debate. I would ask him to please conclude his remarks.
D. Mitchell: Okay. Mr. Speaker, if you agree with this point, I'm prepared to move the necessary motion, which I will now tender to you, along with a copy of my statement relating to this question and a list of precedents showing that the hon. Attorney General should do the honourable thing and step aside.
Hon. E. Cull tabled the 1992-93 annual report of the British Columbia Lottery Corporation for the fiscal year ended March 31, 1993, in accordance with the Lottery Corporation Act; and the report of the Crown Proceeding Act for the fiscal year ended March 31, 1993, in accordance with section 15.2 of that act.
Hon. G. Clark: In Committee A, I call the estimates of the Ministry of Energy, Mines and Petroleum Resources; and in Committee B, the Premier will be rising to ask leave to move a government motion.
Hon. M. Harcourt: Hon. Speaker, I....
The Speaker: On a point of order, the hon. member for West Vancouver-Garibaldi.
D. Mitchell: Just a point of order on the Government House Leader's direction right now. Can the Speaker please rule whether we can have estimates being reviewed in one portion of this Legislature and the Premier moving a government motion, according to the Government House Leader, in Committee B? It makes no sense at all. Could we please have some clarification as to the procedure in the House this afternoon?
The Speaker: Yes. Order, please. There is no motion before the House. There is a suggestion that the Premier will be seeking leave, and he hasn't had the opportunity to do so as yet.
Hon. G. Clark: I'd advise the members of the House that it is not Committee B; the House is still duly constituted. The appropriate direction from the Government House Leader, then, is that Committee A shall sit to hear the estimates of the Ministry of Energy, Mines and Petroleum Resources; and in the House, duly constituted, the Premier will be standing to ask leave to move a motion of importance.
The Speaker: The member for Fort Langley-Aldergrove rises on a point of order.
G. Farrell-Collins: I've reviewed an occurrence similar to this that took place in April last year. It was a decision, I believe, on April 27 by the former Speaker, when the government attempted once again, in our opinion, to abuse the privileges of this House by moving estimates into Committee A and at the same time debating bills in this House. At that time we raised a point of order, on which the Speaker ruled that in fact bills could be debated in this House and estimates in Committee A. The Liberal opposition obviously was not pleased with that decision, but that was the decision.
However, the Premier apparently.... I know he hasn't done it yet, but it's been made known to the opposition that the Premier intends to move a motion, or ask leave to move a motion, which is substantially a motion placed on the order paper by an opposition member, who is not here today to call it for himself. So I think this is a slightly unique case. I do believe it is out of order for the government to be moving motions in this House, as opposed to legislation, at the same time that Committee A is sitting.
Hon. G. Clark: Hon. Speaker, I'm a bit surprised by this, because I have canvassed this matter with opposition members. This is the first I've heard of it.
There was a Speaker's ruling last session that orders of the day -- appropriately called -- could be heard in the House. A government motion qualifies under orders of the day. It's exactly consistent with legislation. A private member's motion does not qualify under orders of the day. Therefore a private member's motion at this time, simultaneous with estimates in Committee A, would be out of order. Of course, we've chosen not to do that. This is a government motion, which qualifies under orders of the day and is consistent with the Speaker's ruling last session.
Interjections.
The Speaker: Order, please. Just a moment, hon. member.
D. Jarvis: Mr. Speaker, I am the critic for Energy, Mines and Petroleum Resources, and I certainly appreciate the opportunity this afternoon to find out what the government hasn't been doing for the last year. But by the fact that this debate is coming up, I will be sequestered in Committee A. I will not be afforded the opportunity to enter into the debate, and I think that is completely wrong. Also, the bill that they're going to be debating will affect me in my riding directly. It also precludes the...
The Speaker: Thank you, hon. member.
D. Jarvis: ...Minister of Energy having an opportunity to get into this debate, which I'm sure she would prefer to do, rather than hearing me telling her how bad her ministry is.
The Speaker: Hon. members, the Chair is listening to the submissions and has reviewed the previous situation referred to by the hon. member for Fort Langley-Aldergrove. However, the Chair believes the best procedure to undertake at this time is to proceed as we had begun, with the Premier seeking the floor. I understand he will be seeking leave. If we can proceed through that stage, we may be able to bring a resolution to this matter. With that, I would recognize the Premier.
The member stands on what matter?
G. Farrell-Collins: I have a possible solution to the problem, if I may ask leave to suggest it to the Government House Leader.
The Speaker: Hon. member, with the greatest respect, I have just suggested a solution.
[ Page 9995 ]
Were you seeking leave? Shall leave be granted?
Leave granted.
G. Farrell-Collins: I offer a solution. In anticipation of the Premier seeking leave, it may well be the choice of the opposition to deny that leave, so I'm suggesting a solution. Tomorrow is private members' day, which is something this House has sometimes been remiss in honouring. There being a private member's motion on the order paper which has precedence over the Premier's own motion, that motion could be called tomorrow. We could have a full debate on that issue tomorrow, with the member who presented the motion in attendance; and today we could continue with the estimates of the Attorney General's ministry.
[2:45]
The Speaker: Seeing no response to that, I call on the Premier.
Hon. M. Harcourt: I'll be asking leave to move a motion that essentially asks this House to condemn the House of Commons Bill C-18....
Interjections.
The Speaker: Order, please. Only one member should stand at one time.
Hon. M. Harcourt: I am asking leave, and I am letting the House know the nature of the motion for which I will be asking leave. The motion reads as follows: "Be it resolved that this House condemns the federal Liberal government's Bill C-18, which shortchanges British Columbia of two seats in the House of Commons, and that this House calls upon the Senate to reject this unfair legislation."
Leave not granted.
Interjections.
The Speaker: Order!
[The Speaker rose.]
[The Speaker resumed his seat.]
Hon. G. Clark: I guess a Liberal is a Liberal is a Liberal.
Interjections.
The Speaker: Order, please.
The hon. member for Okanagan East is rising on what matter?
J. Tyabji: I've been trying to rise on a point of order for some time, hon. Speaker. There has been some disruption.
The Speaker: Would the member please state the point of order.
J. Tyabji: It would seem to me that the Liberal caucus perceives Motion 39, under the name of the Leader of the Opposition, to be consistent with the motion which the Premier was seeking leave to move. However, the motion on the order paper, which the Liberals seem to have been advancing over the Premier's, is actually outdated, because it calls for third reading of this bill not to pass. Since it has passed, they may be willing to give permission....
The Speaker: Order, hon. member. Thank you, the matter has been resolved. Please take your seat.
Hon. G. Clark: I call second reading of Bill 14.
BUDGET MEASURES IMPLEMENTATION ACT, 1994
(continued)
A. Warnke: I'm not sure exactly how much time is left. When I adjourned debate on Bill 14, I had spoken to one aspect of it. As was noted yesterday, the bill is comprised of different parts, and one part was addressed quite eloquently by my colleague the member for Langley, as well as by others. I was primarily focusing on getting rid of the Energy Council Act. When we reflect on it, on May 27, 1992, the then-Minister of Energy -- who is still the Minister of Energy -- introduced legislation that brought the Energy Council Act into being. When one reviews the minister's remarks about wanting to establish a two-year framework.... Admittedly, it was not definitively established that it would be two years but that we would work with a two-year framework. Nonetheless, we now have a definitive two-year period for getting rid of the Energy Council. At the same time, the minister was making contracts with those who would head this particular council for a period of five years. Yesterday in question period my colleague from North Vancouver-Seymour asked why the individual -- Dick Gathercole -- was given such a lucrative contract for a period of five years, including a lucrative severance package, when the Energy Council would only be in existence for two years.
I'm not implying any corrupt motive or anything like that, but it does shake the public confidence to see something such as the Energy Council come into being for a period of two years while such lucrative contracts are extended. That kind of shaking the public confidence really forces us to consider just exactly what the Energy minister had in mind when the Energy Council was brought into being. Didn't the minister consider the implications? If not, that's very poor planning. This exhibits a certain incompetence by the Minister of Energy. My colleague from North Vancouver-Seymour has pointed out time and again how the minister has created all kinds of problems within her ministry. In my view, it's sufficient grounds to even ask for the resignation of the minister.
The fact is that the Energy Council has not lived up to the expectations of the minister herself. By acknowledging that -- through getting rid of the Energy Council -- she may be being honest to some extent, although it is certainly going to be questioned by the public. It does cast a shadow on that particular ministry. On that basis, while all members on this side have expressed how they're going to vote on this particular bill.... Given the complexity of the bill, I found it essential to point out this fact, as well as some of the facts that I pointed to yesterday, such as the problems involved in establishing such councils in the first place. As I said yesterday, I believe it's extremely important for this provincial government, for future provincial governments and for the federal government to re-examine this whole idea of establishing advisory boards, councils and so on. It gives the public the perception that this is a merely a place to put one's friends -- and even if they're not friends, to put elites in those artificial positions.
[ Page 9996 ]
J. Tyabji: I rise to speak against Bill 14. I'll keep my comments relatively brief, but there are a few aspects that I'd like to address.
First of all, with regard to the change as it affects education, what I see happening in Bill 14 is a precursor to a transfer of the administration, and therefore the directing of local education, away from the local school boards to the provincial government. We see through the capping and the beginnings of the takeover of the financial administration of school boards that the provincial government will be taking on more of the responsibility and control. In the past, one thing that has been very effective about local school boards is that they've been able to set local priorities for education spending and education funding. The changes that Bill 14 makes to the School Act are going to be very controversial. In the long run, we're going to see them initiate a series of changes. We may end up seeing an elimination of school boards altogether. If we see an elimination of school boards and the responsibility for local educational priorities being set entirely by the provincial Ministry of Education, then we're going to have problems meeting the needs of the very diverse communities in the province. The north end of the province is extremely different from the lower mainland, which is also different from the Kootenays and from the Okanagan. In each of these areas there are different demands for special needs, for classroom size, for the subjects being taught and for the way in which education is delivered. Those are the kinds of things that a local school board can integrate into their local planning. But once the government starts to cap financing at that level, they're having a direct impact on local control and on what can and can't be done in those areas. There are going to be some long-term problems.
In the past couple of years we've seen a greater demand for provincewide education standards, but that should not be confused with the province controlling the actions of local boards by holding the purse strings. The province can have certain minimum standards or guidelines for the education that is delivered in those areas.... I see the former Minister of Education is here. I would be very interested to hear more from any of the NDP MLAs about how the changes made under this bill would have a direct impact on the future of education in the province.
We've seen a change in the way the teachers of the province are being treated by the government: we've seen an emergency bill that moved the teachers back into the schools when they were trying to strike, we see the call for essential service legislation for teachers, and now we see that the provincial government will be targeting local funding and will have direct control over how local education is delivered in terms of where the money is allocated once it has been budgeted. That's going to be very contentious.
That's not to be confused with the idea that there should be negotiations on acceptable spending limits in that area. Everyone recognizes that money is tight and should be allocated responsibly. That's not to say that school boards aren't already trying to deal with that. In School District 23 we've had a long-term problem with formula funding because of an historic injustice with formula funding in that district. They have had to juggle their books to try to meet all of the demands in their area. If there were a simple adjustment to the provincial formula-funding structure, they would be able to meet the demands of the local area, because their budget would automatically be adjusted. That would put them on a level playing field with the rest of the province.
[3:00]
Places like Surrey and the Okanagan, where there's a very fast growth in students and therefore in demand, are having to meet incredible problems with their budgets right now. Based on what I've seen happen with formula funding historically, if the provincial government starts to direct where the money is going, it's going to exacerbate the existing system rather than solve the problem -- and the problem that needs to be solved is formula funding. The problem is not how the money is being distributed locally but how the money is given to be distributed locally. That's where you get into formula funding.
The difference is that the Ministry of Education currently makes its budget on the basis of formula funding. Some districts have been historically disadvantaged by that, because there are changes to formula funding depending on which of the 75 school districts receive their budgets. Some of them will get 110 percent of the formula; some of them will get 85 percent. When you factor in growth rates and the fact that formula funding does not get adjusted in January if there has been a significant growth in students, you see that the disadvantaged school districts fall further and further behind. That falling behind is never compensated for in the following year. I've been raising the issue of formula funding in the House and in the Ministry of Education estimates since I was elected.
What is going to happen through this bill if there is a targeting and capping of allocation? The money given to the school district isn't going to change, so you will have almost a grandfathering effect on the formula-funding system. The Ministry of Education -- which is, at best, at arm's length from where the decisions are being made -- is now going to be determining, based on a piece of paper with some numbers on it, where the money should be going in that area. The prediction, which I think is inevitable here, is that whoever is going to be lobbying the people in Victoria who are going to be determining where that allocated funding will go will end up getting more money. You will have special interest financing occurring because of the provincial direction of the allocation of funds. That is sometimes bypassed by local decision-making. With local decision-making there's a direct and tangible face-to-face determination of where the money should go. Limited as the money might be, it can be allocated in that way.
There is only so much money for special needs and for some necessary programs. But if the province starts to get involved, not only will we still have the school district in place but there are going to be incredible turf battles and power struggles, and it's not going to meet the bottom-line problem, which is formula funding. An inevitable result of the turf battles will be that we're going to see more of a movement away from school districts, to the point where we may see an elimination of them altogether. Once school districts are eliminated, or once their administration is dismantled, you'll find that locally people will have a very difficult time getting their needs serviced with the money allocated to their area, because the decisions about where the money will go will be made some distance from where the needs are occurring. That's always very difficult.
I have to speak very much against section 9 of the bill, which is an amendment to the School Act, especially to where it says in subsection (3): "A board shall budget and spend its allocation in accordance with any direction of the minister provided to it under this section." I have a very serious problem with that. Rather than the minister becoming more in control of directing the board with regard to the allocation, the minister should be more receptive to submissions made by the board for a change in the funding structure. Maybe we should be moving away from administration rather than moving toward what this is going
[ Page 9997 ]
to inevitably do, and that is add staff to the minister's office in order for that staff to determine whether staff at the school district office are really presenting them with the straight goods on what the needs are in the local area, as determined by the people who live there.
I don't think that this section of the bill will in any way work in the interests of the public. It's actually contrary to what I've been hearing, not only from constituents and teachers in my riding but also from the administration in School District 23. Since I have been elected, they have been representing to me that the problem in education, if anything, is that at times there is too much direction by the provincial ministry in areas where very little direction is needed and too little help in areas where help has been needed for too long, such as in the formula-funding system.
One thing that can be commended is that the Energy Council has been eliminated under this bill. This is a good thing. The problem is: why did they have it in the first place? It was a waste of money. As I understand it, Mr. Gathercole will be receiving another $300,000 in salary as a result of the termination of the Energy Council, because his contract still has to be honoured. I hope that Mr. Gathercole will be put to good use for that money and will perhaps be providing input at some level. I'm not quite sure what he can do. I would like to hear more from the Minister of Energy about the fact that last year and the year before there was such ardent defence of the Energy Council. That act has quietly been repealed by one line in Bill 14, a bill that amends so many different aspects of government legislation. So it remains to be seen how the rest of this bill will impact the proceedings of the House.
I would like to emphasize very strongly that I'm standing in opposition to this bill, most particularly the amendments to the School Act. I think it's contrary to the public interest. I look forward to committee stage of this bill, so we can look at some of the other implications of the bill in much more detail, and so the Minister of Energy, Mines and Petroleum Resources can explain to the House why one line in Bill 14 is repealing the Energy Council when there's still a $300,000 obligation in salary to the person who's contracted to be responsible for that to the government.
M. de Jong: We on this side of the House have long suspected that this government is drifting aimlessly from economic crises to economic crises of its own making. We have a sense on this side of the House that the government knows not where it intends to take this province nor what its vision for this province is, and has left us in a vacuum and with a vacuum of leadership.
That becomes more understandable when one also recognizes, as this particular Bill 14 forces me to conclude, that members of the government and members opposite have no regard for where this province has come from or for the history that has built this province. In particular, the inclusion of sections in Bill 14 -- particularly sections 7, 8 and 9 -- dealing with the School Act indicates that this government has no regard for the autonomy of school districts that are responsible for building, on a community-by-community basis, the education system we have in place today. This province was built by pioneers who came to communities and recognized as their number one priority the need to educate their students and children. They built the one-room schoolhouses, later two- and three-room schoolhouses, and ultimately the fine secondary and post-secondary institutions we have. But they did so on the basis of direction from within the community, out of regard for the community's needs and priorities. This government, by virtue of what it is including in this Bill 14, shows a disturbing lack of regard for that history and the fundamental understanding of what has built our education system.
The provincial government has already removed, for all real purposes, the ability of school boards to raise revenues. That is no longer an option. Now, by virtue of this act, the provincial government presumes to remove the discretionary authority -- previously vested with local school boards -- to direct the manner in which funds are spent on their students. I can think of nothing more reprehensible or more calculated to remove the autonomy from local officials -- the autonomy they need to provide service in the manner they see fit to their students and to the parents of those students. I sit on a school board and will continue to sit on that school board for several more months.
M. Farnworth: Double-dipping at the taxpayer's expense.
An Hon. Member: And you guys know about that.
M. de Jong: Yes, and once again the member rips himself away from his gripping journal to patter out the same standard claptrap we're used to hearing from that side of the House.
Interjections.
The Speaker: Would the hon. member for Coquitlam please come to order.
M. de Jong: It's the same standard, tired line we're used to hearing from that side of the House, with no regard for what the people of British Columbia are genuinely after -- the responsible expenditure of public moneys.
As I've said before, if the member had bothered to take the time to research the matter, he would know that a by-election is being planned in Matsqui to fill my seat. That will cost the taxpayers not one extra dollar, because it's going to be tacked onto an amalgamation vote. But this member would say: "Resign and force those people to spend $25,000 needlessly on a by-election that doesn't have to take place."
Interjections.
M. de Jong: It's the same old claptrap we're used to hearing from that side of the House.
Interjections.
The Speaker: Order, hon. members. I request that the hon. member for Coquitlam not speak from his seat. All hon. members know the standing orders with respect to parliamentary behaviour. Clearly this is unacceptable, and I would ask members to conduct themselves accordingly.
M. de Jong: My experience at the local school board level has taught me about the difficulties associated with budgeting within the existing framework. We are undertaking that budgeting process now, and I can tell all hon. members that it is not a particularly appealing process at the moment, given that local boards across the province are being forced to look in every nook and cranny for places to cut.
The days of considering program expansion is long gone. There is no longer any consideration for introducing programs that might enhance the delivery of education
[ Page 9998 ]
services in various communities. Those days are long gone. Year in and year out it's a litany of cuts to service and programs. And who suffers? The children. But to this point, at least, local boards have had the autonomy to direct the manner in which those cuts take place. In that respect at least, that amount of local control has been preserved.
There is no doubt that there are inherent difficulties with the present funding formula. The former Minister of Education is here, and she is aware of those difficulties. She was aware of them when she was the opposition critic. She is aware that an attempt was made to tinker with that formula. She is also aware that the district I represent went to extraordinary lengths to have an audit conducted that confirmed some fundamental flaws in that funding formula. And how does the government of which she is a member respond? It responds with a draconian piece of legislation that will rip the very soul out of these boards. They can't raise revenue anymore, and now they are going to be told exactly how to spend the money they receive. I can't think of anything else that you can read into the section.
[3:15]
Section 125.1(3) is pretty clear: "A board shall budget and spend its allocation in accordance with any direction of the minister provided to it under this section." Why don't they just get rid of the school boards? If they're going to wrest away from local boards the single meaningful jurisdiction they have left, what's the point? But this government doesn't have the courage to say what it really means. It will go about it in a piecemeal way. It will embark upon a process of long suffering for local boards. It will continue to play a game with them, as it has over the course of the last two years.
The fact that this legislation is even before us today represents this government's acknowledgement that a directive sent out by the Minister of Education was ultra vires the present act. The minister has sent out a directive to local school boards stating that administrative costs will be capped -- in effect, telling local school boards how they're going to spend their money. The process is already started. The minister doesn't have that authority, not until this section passes. But in complete disregard for the power and discretionary authority allocated to him, the minister disregards that law and says to local boards: "I don't care what the School Act says. I don't care what the legislation says. You're going to do it my way or the doorway." Of course, he has the budgetary control powers to implement that very approach. He says to them: "Look, you're going to do it my way, or I'm cutting you off." The legislation, as it now stands, doesn't provide for that.
T. Perry: He usually says: "My way or the highway." He's a former Highways minister.
M. de Jong: They say "My way or the highway" in regard to the Island Highway project. That's what they said when they tried to build the Island Highway: "Do it my way, or no highway."
So why is there a problem? Why have school boards found themselves constantly under siege and now essentially massacred by this government? Well, it's because this government has ignored the pleas of school boards that have called out for government assistance when wage settlements, far in excess of what they were funded for, were thrust upon them. The difficulty is not -- certainly not entirely -- one of the local boards' making.
Year in and year out, boards have made representations to the Education ministers and deputy ministers, saying: "Look, we're being forced to comply with demands for wage settlements -- 6, 7, 8, 9, 10, 11 percent. We've got no choice. We're besieged by labour stoppages, work-to-rule campaigns, withdrawals of services. Parents are screaming that they want their kids in school. Kids' graduations are being jeopardized."
All of these things that boards have been saying to ministerial officials and to this government have fallen entirely on deaf ears. What is the response from this ministry and from this government? "Tough. You find a way. You get through it." Then as boards struggle to trim -- they're down to the bone; now they're chopping away at the bone -- this government comes along and essentially says: "To hell with you. We'll do it for you. We'll tell you where you're going to spend your money. We'll tell you how much you should spend on a textbook for a grade 6 class in Abbotsford. We'll tell you how much you should spend on your principals. We'll tell you how much you should spend in your libraries." If government members dare to stand up and tell me and the people of British Columbia that this legislation doesn't allow for that kind of direct control from Victoria, they're misleading everyone. Direct centralized control is precisely what this legislation provides for. I wish the minister had the courage to stand up, rather than hiding such a provision in a Budget Measures Implementation Act, and say to school boards across this province: "We're cutting you off at the knees. From now on it'll be the way I want it to be, and too bad for you." But the minister doesn't have the courage to say that, Mr. Speaker.
It's tough to know where the Minister of Education is most days, actually. He hides these provisions within surreptitious, omnibus bills that make their way into the House. We don't hear much from the minister. But when we do hear from the ministry, this is what they tell school boards: "It's not as bad as you think, because you can get around these provisions." This is a clever government, because they bring in these draconian measures and say: "You can get around them. Just use a little creativity in your accounting." And why not? It's something they employ with great elan on a much broader scale. We see it insofar as the global budget is concerned. Who knows how far in debt we are? The government hides a little here, hides a little there. They say to local boards: "Follow our lead. You can do the same thing. Oh sure, we're putting a cap on administrative salaries, but you can get around that. If a principal signs a report card, that really represents teaching, so you can include that in the teaching aspect of your budget."
No one is buying it. It's a cop-out on the part of this government; it's a cop-out on the part of the Minister of Education. It makes me ill to know that this government -- presumably made up of individuals who hold concepts of grass roots and autonomy sacrosanct -- would sell out the ability of local politicians and community members to direct the affairs of their own community. It would sell them out utterly and shamelessly in the way that this government has done.
There's another aspect of this bill that members and the minister are conveniently choosing to ignore. In the midst of condemning local boards for what they claim to be excessive expenditures, presumably in some indirect way acknowledging the burden being faced by local school boards.... The former Minister of Education used to write to us quite regularly, and she acknowledged the difficulty we were facing. She would say: "You are facing severe financial constraints in School District 34." Presumably the same form letter went around the province to 72 school districts. She would acknowledge that. In the very next breath, we see sections 7 and 8 of this act, and what are they doing? They're downloading further costs onto the local school boards.
[ Page 9999 ]
They're saying: "We're going to amend the Pension (Teachers) Act; we're going to shift responsibility." In the case of Abbotsford, it works out to a further $150,000. This government is saying: "Not only are we going to direct the way you've got to spend the money we give you but we are also going to further curtail your discretion by downloading further costs onto your board and down to the local level."
Only now is word filtering out to school districts across the province about what this government is proposing to do. No one is fooled, because everyone knows what section 125.1 (3) means. "A board shall budget and spend its allocation in accordance with any direction of the minister provided to it under this section." All semblance of local autonomy has been removed by virtue of this bill's submission by the government. It's a shameless act. It's a cowardly act. It's entirely inconsistent with the principles of local community leadership that have built this province and our education system. The minister who has introduced this in such a surreptitious way should be ashamed.
J. Weisgerber: I'd like to spend a few minutes talking about a couple of sections of Bill 14. I'm particularly interested in the areas dealing with the Energy Council -- my friend and colleague, the member for Peace River North, will have more to say on that subject -- and also in speaking in some detail about the Endowment Fund.
First of all, the Energy Council was introduced in the first sitting of this government in 1992 -- one of those many new, fresh, bright ideas that we saw with this new government in 1992. Many of us expressed concern in 1992 about this Energy Council and questioned whether it was going to serve any purpose other than to find patronage appointments for six or seven needy NDP supporters who had worked hard on the election, were not gainfully employed and were looking for somewhere to go. So I guess somebody thought: "Well, we'll have this little Energy Council. They can trip around the province, stay at nice hotels and run up some expenses. We'll pay them a nice little salary. We'll even give some of them five-year contracts. We'll give them two years' work, but they might not take all this lolly if we only give them two years' pay for two years' work, so we'll give them five years' lolly for two years' work."
If the work had been useful, if they had got anything out of this Energy Council, perhaps I wouldn't be so agitated about it. But the Energy Council caused the province to quit planning for energy consumption and energy generation in this province for two years. They essentially put a moratorium on action that the government should have taken. For two years we've seen independent power producers being told to wait until the Energy Council has an opportunity to consider this issue. As for wood waste cogeneration, we continued to use beehive burners all through the interior and pollute the air in small communities all around the province. We denied those people an opportunity to use that resource for electrical generation. We said: "No, hold on. The Energy Council's coming. They're going to have a better idea -- a grand strategy for energy generation in the province."
All of the other co-gen projects, all of the imaginative ideas that could have been put to use, were stalled by this silly council as it tripped around, drafting up heaven knows what. At the end of two years, it hasn't produced anything that I've seen that's worth reading. There's no market. The minister responsible for B.C. Hydro visited Mackenzie with me to talk about the alarm over the excessive use of water out of Williston Lake to generate electricity, and told the people that there were no other options except to draw down Williston Lake and to buy water. In fact, the minister bragged about buying electricity from Alberta to fill in....
[3:30]
An Hon. Member: Shame! Shame!
Hon. G. Clark: To help.
J. Weisgerber: To help! Hey, it was to help -- while this silly Energy Council was going around telling people not to bring on stream small independent power projects, hydro projects, wood waste or waste heat cogeneration, or gas-fired generators. All of those things were put on hold because some silly group of hacks needed jobs and were put on the payroll for a couple of years, and now are quietly disbanded.
But my goodness, I don't sound as if I'm delighted. I really am. Thank goodness we've put this thing to bed. We've now taken it out and given it what I suppose the new legislation on prevention of cruelty to animals would approve of: put this critter out of its misery. Obviously it was one of many mistakes made by this government in 1992. If it was a good year for wine, 1992 certainly wasn't a good year for government, because this year we see the repeal, turn-back and reversal of almost every action taken in 1992. This current year, 1994, the primary focus of the budget and the legislation we've seen to date is to turn back all the decisions that were made in 1992.
Indeed, when we look at the British Columbia Endowment Fund Act.... You'll recall that the Endowment Fund the government tried to intimate it was creating was in fact the renamed privatization benefits fund. It had been created when there was a sale of assets, primarily due to the privatization of highways maintenance.
L. Boone: A fire sale.
J. Weisgerber: Indeed, there was raised about $600 million or $700 million that...
Interjections.
J. Weisgerber: ...I suppose could have been used the way the government now proposes to use the Endowment Fund.
Hon. Speaker, perhaps you could talk to the Government House Leader and ask him if he wouldn't allow the member for Prince George-Mount Robson at least one opportunity to stand in the House this year. She seems to have been too much under the whip, and she's starting to chafe over there in the corner.
The Speaker: Order, please. Hon. member, please proceed with the debate.
An Hon. Member: It's the long walk from the other side of the House that's done her in.
J. Weisgerber: It was indeed a long trip from cabinet to the Hall of Shame.
An Hon. Member: You'd walk -- to the penalty box.
J. Weisgerber: No, you have some hope of getting out of the penalty box.
The Endowment Fund, created in 1992 from the privatization benefits fund, was used very effectively by the Ministry of Finance to invest in a number of different entities -- companies, stocks, bonds -- and over the years, I understand, returned to the province anywhere from about 18 percent to 27 percent.
[ Page 10000 ]
Section 1 of this new act says, "Section 3 of the British Columbia Endowment Fund Act, S.B.C. 1992, c. 33, is amended by striking out 'in perpetuity'" -- and essentially substitutes a clause saying: "We're going to sell it off." So the government's idea of perpetuity, two short years ago, is now to put on the block $600 million or $700 million worth of stocks that are earning far greater return for the province than the province pays in interest.
Obviously the government is doing this to reduce the amount of borrowing that's necessary. The government brought in a budget -- and this is the Budget Measures Implementation Act, 1994 -- that suggested that there was a deficit in British Columbia of less than a billion dollars, but the government has to borrow $2 billion. One has to ask: if the government is only spending a billion more than it takes in, why is it borrowing $2 billion? If it were not selling off the Endowment Fund, it would have to borrow another $300 million or $400 million this year and a like amount next year. The government is simply trying to camouflage the true extent of its borrowing and is willing to sell off an investment fund that's earning 20 percent on average in order to do that. Why would the government be willing to sacrifice that kind of investment portfolio simply to pay down the debt? I suggest that it's because the government is embarrassed about the amount of money it is borrowing every year, and it is using this in a very shortsighted manner that has everything to do with politics and nothing to do managing the business of the people of British Columbia.
This fund, set up in perpetuity two years ago, is now simply being done away with. Now we know what perpetuity means in the minds of cabinet members and NDP members: it means perhaps as long as two years. If the government says that they're going to give you rights in perpetuity, it means a couple of years -- if you're lucky -- before somebody brings in an amendment to strike out the word "perpetuity." It's not very comforting, and it's not very good business.
This is simply a bad business decision, made by a government that believed it had to camouflage the true extent of its spending and of the debt that was being created. If you listen to the genuine alarm in British Columbia over the extent of the accumulated debt and over the debt that's being created by this government, then one can understand that they well might do almost anything to reduce, hide, bury or camouflage the true extent of their borrowing.
It's a tragedy that the government is willing to sell off this investment fund, which was established not through its own efforts but through the privatization process. In order to have a very short-term gain, the province is willing to sacrifice this asset.
I'll be voting against this bill, particularly because of the section involving the Endowment Fund. Mr. Speaker, I want you to know that when we get to committee stage, I will be heartily endorsing the section dealing with the elimination of the Energy Council.
[D. Lovick in the chair.]
W. Hurd: I'm pleased to rise today to speak to Bill 14, Budget Measures Implementation Act, 1994. I want to speak particularly to the fate of the B.C. Endowment Fund and the Energy Council. I have a great deal of interest in the Endowment Fund by virtue of the concerns I have heard as a member of this assembly about how this fund was managed.
I couldn't help but reflect on the remarks of the Reform Party member about the need to retain this fund. I wonder if that member was listening to the public concerns that have addressed the principle of having the government invest large sums of money in companies that are themselves heavily regulated by the B.C. government.
As the members opposite well know, this issue with the Endowment Fund first hit public attention when the government made a substantial investment in MacMillian Bloedel during the period preceding the decision on Clayoquot Sound. Indeed, the furore was so great that the government was moved to appoint the late Justice Peter Seaton to investigate whether or not the fund managers could be in a conflict-of-interest position, by virtue of investing public money in a fund that was not at arm's length from the B.C. government.
During this debate, the opposition received calls from all over North America and from public policy experts in California and Washington, who were exceedingly amazed to learn that public conflict of interest really did not exist in British Columbia and that the only conflict-of-interest legislation that did exist pertained to private members of this assembly. The only law on the books.... They were astonished that a fund like the Endowment Fund could invest somewhere in the region of $100 million in Westcoast Energy and a substantial sum -- many millions of dollars -- in MacMillan Bloedel, which are heavily regulated by the British Columbia government.
During the course of that debate, the people of the province certainly indicated to the opposition their discomfort with having such large sums of public money invested in companies which the government regulated. This measure that the government is taking in this bill recognizes that public concern. As the previous member indicated, it may be partially the result of politics. But I think it's a recognition of the public discomfort over having such large sums of money invested in companies like Westcoast Energy and MacMillan Bloedel, which really do rely on favourable rulings from government and which have a direct impact on their share values.
At the time of this debate, which occurred almost a year ago, I filed complaints before the B.C. Securities Commission. In addition, we asked for a separate, independent inquiry by the conflict-of-interest commissioner, Ted Hughes. The government elected to appoint Justice Peter Seaton on that occasion. It's interesting that the Securities Commission, by virtue of the Seaton ruling, never did deal with the principle of whether a fund investing on behalf of the province could be guilty of insider trading. That's a narrow securities issue which we've never really had an opportunity to address. When funds such as the B.C. Endowment Fund are investing small sums of money -- maybe even a million or two at a time -- the public is less concerned. But when we have a fund of $500 million in which two of the largest investments are in the region of $100 million, whatever the fund earns in revenue is clearly outweighed by the public concern about these investments being made on behalf of the province.
Moving on to the lamented Energy Council, I can recall many occasions in this assembly when the opposition pointed out that there wasn't a single activity of the Energy Council which couldn't have been completed by staff within the Ministry of Energy, Mines and Petroleum Resources. Having viewed the report of the Energy Council and having scrutinized its activity, the opposition continues to be totally unconvinced that this wasn't a parallel process to the ministry, that it really became a home for people who had spent their time shadowing the B.C. Utilities Commission in a previous life, and that it was really representing a tremendous waste of the taxpayers' resources in British
[ Page 10001 ]
Columbia. So I'm certainly pleased to see that the government has taken the advice of the opposition on that matter and in this bill has decided to scrap the B.C. Energy Council.
This is one of those budget implementation bills that covers a multitude of sins of omission in the general budget. Despite the fact that the government has undertaken positive measures with respect to the B.C. Endowment Fund and the Energy Council, I know that this bill has caused members of the opposition a great deal of concern and represents an enabling piece of legislation for purposes of bringing forth a budget that the opposition has consistently spoken against.
[3:45]
The dissolution of the Endowment Fund, which has been such a source of controversy in the province, is a positive feature of this bill. There are some lessons for us to learn. The public might have been comfortable with wholesale investment in shares of publicly traded companies 20 years ago, but I think attitudes have changed and people want to see a more simplified government. They want a government that gets on with the business of revenue collection and prudent and responsible spending, and the types of activities that involve speculation in large enterprises in the province are not in the best interests of the taxpayers and the people of the province.
As I recall that debate a year ago, I remember some of the members opposite pointing out that these types of investments in the Endowment Fund had the effect of creating employment and propping up the fortunes of the company. As anyone who engages in the stock market knows, there is absolutely no correlation between the health of the company you might be investing in and propping up employment and investment. It's a speculative venture only, designed to earn a profit for the fund. The government's decision to sell off the Endowment Fund represents a chapter that's been turned in the province. We on this side of the House hope that the lessons have been learned well and that that type of concept goes into the history books in British Columbia.
Deputy Speaker: Before recognizing the member for Peace River North, I understand that the member for West Vancouver-Garibaldi seeks leave to make an introduction.
Leave granted.
D. Mitchell: Thank you, Mr. Speaker, and thanks to the member for Vancouver-Little Mountain for that enthusiastic "aye."
We have with us today in the galleries a group of grade 11 students from Howe Sound Secondary school and their instructor, Mr. Dave Manning; I think there might be some other members of the group as well. This is an enthusiastic group. I had a chance to meet with them prior to the House convening this afternoon.
They are here to take a look at how the Legislature works, and they might be interested to know that this afternoon we're debating one of the budget bills that the government has brought in. They should also be aware that there are a number of other meetings taking place in committee; that's why other members aren't here. But this is an example of what sometimes happens in the House. I hope the members who are here this afternoon will welcome them.
R. Neufeld: I rise to speak very briefly to Bill 14. I guess it doesn't come as any surprise to members that I wouldn't support this bill. I'll go through it briefly, and I'm going to start with the British Columbia Endowment Fund and the amalgamation of that $700 million or $600 million -- it's one or the other; it's in that area someplace. It depends on which part of the budget book you look in. To do away with that fund and put it into general revenue, so that your deficit is reduced by $300 million -- that's this year's specific estimate -- is entirely incorrect. Obviously it shows that this government is starting to get a little worried -- and so they should -- about another election that could be coming soon -- maybe within the year, maybe within two years. Who knows? I guess they're so low in the polls now that maybe they'll run the full five years; I'm not exactly sure. I don't know why you'd want to kick yourself out of office, but that is obviously going to happen.
To do away with the privatization fund -- and that's where it started.... It was actually a fund set up by the previous administration to sell off equipment and identities of government when they privatized an awful lot of government during Bill Vander Zalm's term in office....
Interjection.
R. Neufeld: The member for Prince George-Mount Robson talked about a fire sale. Certainly some of the items were sold at less than value, but I think the taxpayers probably received good value for that equipment. In fact, I would like to see the government really finish off selling the equipment that was supposed to be sold -- I see it sitting around the province in different yards, gathering rust; maybe it should be liquidated also.
It was changed from the privatization fund in 1992, in the first budget after this government came to office, and called the British Columbia Endowment Fund. Every one of the government members who gets up and talks about it says how great this fund is and how they set it up. They don't say where the money came from, and that it was already there; all they did was to rename it. I think they used it in some cases. One case that comes to mind is when Cassiar Mining was locked up by this government and, in fact, torn down. Probably not many members here have travelled up and had a look at Cassiar.
Interjection.
R. Neufeld: The member for Saanich North and the Islands says he has. I know I have been there and seen what happened. I certainly didn't think it was wise for the government to shut down that economic activity. But they expended some $100 million or something on relocating people who worked at Cassiar. In fact, in estimates last year, when I went in to ask every minister I thought could be responsible for Cassiar, nobody could really say where or how the money was expended. But this is what the fund was set up for initially. In fact, if I remember, the Minister of Finance at the time talked incessantly about using this fund to help relocate people who are in areas where single-industry towns have closed down. I find it interesting that right now there are a number of single-industry towns on the Island that, as a result of the CORE report, could be shut down because of a number of things: a reduction in annual allowable cuts from the Ministry of Forests, and an increase in parkland from 6 percent to 12 percent. The British Columbia Endowment Fund was basically set up to take care of the people affected in those communities. That's what this government set it up for in 1992, and they took every possible opportunity to tell us that that's what they were going to do with this fund.
[ Page 10002 ]
Now we have what's happening with the CORE process on the Island and what will happen in the interior and in the Kootenays: a number of single-industry towns will shut down. But we will have no Endowment Fund left. What have they done with the Endowment Fund? They put it into the budget so they can say that they only have a $900 million deficit instead of $1.3 billion this year -- if that's what they take in at the end of the year. But who knows?
What are we going to do about those communities? I understand that there's going to be an announcement later on today. About 5 o'clock tonight we'll see it in the buildings down below. The government is going to come forward with some new idea to tax industry for about $500 million or $600 million to help displaced workers. That's a double standard. If we're displacing workers -- and this fund was set up to help in those areas -- then why in the world are we looking at a bill that's going to do away with that fund? It's absolutely backward. But it's not a surprise for this government to do things that way. It's just to make them look good.
They know that they want to get the deficit down to $900 million this year. If you add the other $300 million that the government plans on spending for highways, all of sudden we've got a $1.5 billion deficit. The real numbers start coming out. It really makes me wonder just where this government is coming from.
Just as an aside, it came to mind when I talked about Cassiar that we had the Premier stand in the House and talk about provincial assets and tell us that we shouldn't be worried about debts. Using his numbers, he said that we have some $60 billion in assets, so why should we be afraid if we've got $27.5 billion in debts? Until now I haven't had the opportunity to remind the Premier that a school was just completed in Cassiar for about $3.5 million. It opened in November 1992 and closed shortly after, in 1993. Another school district bought that school. I think they got about $200,000 for it. It's tough to sell a school; it's tough to take it across the auction block. It's tough to sell a hospital or a piece of road. But the Premier thinks that as long as you have $60 billion in assets, you're laughing. It's a real asset if you're a private company whose assets are fluid, and somebody will buy them for some reason. That's why people are wondering what this government is doing.
This Endowment Fund also raised a tremendous amount of money for government. I think the member for Peace River South stated it in percentage terms. If you go back to the '93-94 estimates, the government estimated revenues of $39 million from the Endowment Fund; actually, in their revised forecast, they received $65 million. This year, lo and behold, we are budgeted to receive $73 million, but we're doing away with half of the fund. To even contemplate doing away with the fund is inherently wrong. Why would you do away with the B.C. Endowment Fund -- a rainy-day fund, or whatever you want to call it -- when you can raise $73 million a year from it?
I want to talk a little about the Liberal philosophy here and the Liberal Finance critic, and I have....
Deputy Speaker: Excuse me, member. I believe there is a point of order from the member for Saanich North and the Islands.
C. Tanner: I think it's important that every member be entitled to an audience, and this particular speaker has some interesting things to say. I think we need a quorum, Mr. Speaker.
Deputy Speaker: The standing orders make it very clear that at the discretion of the Chair one can call for a quorum. I am going to count -- with the member's approval, I hope -- on the fact that my voice coming over the loudspeaker will make the point that we don't have a quorum, and that those members who are, I'm sure, assigned to be here will therefore come along and do their duty, rather than ring bells and bring a whole bunch of people who might otherwise be engaged. I hope that's acceptable to the member.
C. Tanner: No, Mr. Speaker, it's not acceptable. It is the practice in this House to ring the bells when we require a quorum. I think the Speaker should do that.
[4:00]
Deputy Speaker: Again, member, I just want you to know that it's a discretionary call, according to the standing orders. But given that you are obdurate in your request, I am prepared, then, to ring the bells.
The member for Peace River North may continue if he wishes.
R. Neufeld: I just want to comment briefly on the position of the Liberal Finance critic, the member for Delta South, whom I have an awful lot of respect for. To be honest, I listen closely to what that member says. The Liberal philosophy is that there should be no fund at all, because when you invest that money you buy MacMillan Bloedel shares, and then we see what happened with Clayoquot Sound. It's the same with Westcoast and the Vancouver Island pipeline. I don't see that as a conflict at all; I'm really surprised at that attitude, because that member knows as well as I do that this government constantly invests millions of dollars in pension funds and, I would bet, in a certain amount of MacMillan Bloedel shares, Westcoast Energy shares -- the list goes on. So what is the difference between investing the $600 million in the B.C. Endowment Fund in those stocks or bonds or whatever you want to talk about, and investing in the teachers' fund or the BCGEU pension funds? It's exactly the same thing. I would think that governments would do this as a matter of course, because it makes good sense to get as much money as you can out of your investments. If you can get a return of some 20 percent, why not? So there's absolutely no need, as far as I see it, to do away with the B.C. Endowment Fund.
The Energy Council Act is the second part of this bill. This was another fiasco that went on for two years. It started in June 1992. I think that at the time the Energy Council was started, I was somewhat supportive of the minister -- until we saw what was going to be done with the Energy Council and decided that we, as a caucus at that time, would oppose it. This is another little operation that was started by this NDP government. The government thought that they would set something up in perpetuity, and the member for Peace River South talked about that. Within three years they're going to disband it, and it will be gone. But they hired a person, who was earning around $100,000 a year plus benefits, on contract for five years.
It should not come as a surprise to anyone in this House that the person who was hired -- and I'm not going to name him -- is quite a good friend of the government. The government hired him for five years, probably knowing full well that within three years they were going to disband the Energy Council. Before I get away from the salary, I would imagine that we're either going to have to continue to pay this person to sit around in a nice, big office for the full five years, or whatever -- I don't exactly know -- or the taxpayers, not the government, are going to have to buy him
[ Page 10003 ]
out. Like I said, when governments make these kinds of ridiculous moves, the government party should be responsible for looking after that person, because that's exactly where he belongs: working for the NDP, not for the Energy Council.
On top of that we give him an enriched pension. I forget what percentage it is, but it's fairly high. The chairman of B.C. Hydro gets a pension of $100,000 a year after five years of service. That's just great, isn't it! I'd like to have that; it wouldn't be bad. Everyone in British Columbia wouldn't mind having something like that. But it's ridiculous to do that in this day and age, when they're penny-pinching and cutting back the funding on all kinds of things. Mr. Gathercole got a five-year contract and an enriched pension plan of $100,000 a year for running the Energy Council for just two and a half years. It's absolutely ridiculous. It's something that could have been done quite well within the confines of the Ministry of Energy, Mines and Petroleum Resources. That's where it should have happened.
Right at the start they shut down every independent power producer that wasn't far enough along. Fortunately, a couple were. They shut the others down because they were going to do a big study. They ran around the province getting all this information on IPPs. In the meantime, the reservoirs in both the Columbia Valley and the Peace region were getting low because of not enough snowpack and dry summers. But this tremendously efficient and effective Energy Council still decided to shut down all IPPs.
If you go back and read the export permits from the National Energy Board, you will see that we sent natural gas -- most of which comes from my area -- across the border into Washington. What did they do in Washington? They built plants to produce electricity. And what did they do with that electricity? They sold it back to British Columbia. That's just how swift this operation is. But knowing the Minister of Energy, it took many years for it to sink in that what we should have been doing was building those plants and producing that energy here and creating jobs and taxation for British Columbians. But what did we do?
Interjection.
R. Neufeld: I hear a little voice back here: "That was the Socreds." Why don't you go back to sleep in your office, where you were just a few minutes ago? I guess I can't say he was asleep. I apologize to that member. He wasn't in the House, that's all.
Deputy Speaker: Excuse me, hon. member. Was there a point of order, or has the point already been made?
T. Perry: Point of order. I am reliably informed that the member opposite was so fascinated by the speech that he came from his office to listen to it in person, and he was not sleeping in his office.
Deputy Speaker: I do want to thank the member for that clarification and would ask the member for Peace River North to please proceed.
R. Neufeld: Thank you very much, member for Vancouver-Little Mountain.
That's exactly what happened with the Energy Council. It's interesting how the Energy Council budgets are funded. I have the first annual report, from June 26, 1992, to March 31, 1993. The 1993-94 report will be the last annual report. The unaudited financial statement for that fiscal year was $1,341,998, and that was funded by charging B.C. Hydro the biggest share of $652,000. B.C. Gas paid $616,000. Where this money comes from to fund the B.C. Energy Council goes on and on, so that we can shut down independent power producers. B.C. Gas sells lots of gas. Pacific Northern Gas and West Kootenay Power funded it. Even Yukon Electrical funded some. I don't know how that happened, but obviously they talked the Yukon into some kind of funding. But there we are, selling gas to the U.S. for them to convert into electricity, and we are losing the jobs and taxation and all the revenue that goes along with it.
It is interesting to note that we're going to wind down the council, yet in the estimates, asset acquisition last year was $40,000; this year it's $10,000. If you're winding down, one wonders why you would want to buy $10,000 worth of assets. It's absolutely amazing how this government operates. What would that $10,000 be for? This is what the council was really adept at doing. I have all their minutes. I have everything for the last two years in one thin file -- it's very small -- in my office. The council approved a $10,000 sponsorship, contingent on having exhibit space and an opportunity for council presentations during the Futures Fair in Vancouver. That's what the B.C. Energy Council has accomplished this year. Absolutely amazing!
Downtown Vancouver uses most of the energy in British Columbia. If we are going to do anything like that, we should be doing it in the areas where that energy is produced. We should be doing things up there. No, this government would never do that. They don't want to get any further north than Prince George or Prince Rupert, because what's in the rest of the province might surprise them.
The Energy Council was an absolutely ridiculous thing to have in the first place, so I don't know why I should be standing here complaining. But I am glad that they are finally going to wrap it up and be done with it.
An Hon. Member: What did you expect out of a bunch of NDP hacks?
R. Neufeld: Yes, really. Half a dozen of them.
I'm going to touch briefly on teachers' pensions. Here again we have the government deciding that school districts should be responsible. I'm going to use numbers from the member for Delta South. There is $2.3 million more for teachers' pensions having to do with the Medical Services Plan. That was another little gift. What this government has done for the teachers since they came to office has been tremendous, and I guess this is just another move. I know that $2.3 million for education in the whole scope of things is pretty small, but every little piece counts. Listen to the government and to past and current Education ministers talk about school boards being responsible and spending money wisely -- those types of things. Make sure you're spending right your $10 here and your $100 there. I think $2.3 million is a fair amount of money, especially when all of the other things that are being downloaded onto school districts come to light. It is serious. Why would we do that?
The capping allocation in the School Act is the big hand of government telling school districts and duly elected school board members all across the province exactly how they're going to spend their budgets. A while ago one member asked why we have school boards. It's almost getting to that point. Why do you want school boards? We're going to have provincewide bargaining, so you've taken bargaining away from them. You're going to tell them how much they can spend on administration; you've taken that away from them. You're going to hand down more teachers' pension costs.
[ Page 10004 ]
You're going to tell them how much they can spend on aboriginal education and where it should be spent. It surprises me that they didn't just abolish school boards. Do away with them, because you and I know.... The Minister of Education probably feels that he can run it from Victoria quite well all on his own. Maybe that's where this government is finally going.
[4:15]
Those boards were duly elected by the people in those school districts to run the affairs of that school district, and here we are taking away some of the authority that was given to them to manage their own affairs.
Interjection.
R. Neufeld: The member for Mission-Kent says in the background that I asked for the abolition of school boards. I certainly didn't. I'm saying that as you take more and more responsibilities away from school boards, which is what this government is doing, you are probably on the way to abolishing them. That's where they're going.
There are many other things. They are doing away with the Cultural Fund, a supposed special account fund of $20 million. There are issues that the Minister of Finance calls small housekeeping items that make up quite a bit of a bill that deals with half a dozen items. I look forward to going through committee stage on each and every one of the items that this bill deals with.
I close my remarks with that. I will not be supporting Bill 14.
C. Tanner: I rise today to say a few words on the Budget Measures Implementation Act, 1994. We have an expression in the country I come from: "You use a sprat to catch a mackerel." You use a little fish to catch a big fish. In some ways, that's what this bill is. It's another of this government's omnibus bills that has a little in it to please and a few things hidden. What operating in this fashion does is that if you agree with the bulk of it, I suppose you're persuaded to vote for it.
The last occasion this government tried one of these jobs was a year ago. It was called the Consumer Protection Statutes Amendment Act. With that act, they wanted to have some control over direct-sales people and, maybe quite rightly, over car dealers, as there are a few of them around who probably need controlling. They also wanted to bring the credit reporting companies under some control.
It won't come as a surprise that they managed to get their bill through, because there are 51 of them and 24 of the people who oppose them. But you'll notice it hasn't been proclaimed yet, and the reason it hasn't been proclaimed is that they wrote it up wrong. They've got all this expertise to help them over there, all these companies they contract to, all these people in their own departments, and they couldn't even get the lines right. So nobody is being protected from direct-sales people. I don't know whether anybody needs to be protected from car dealers. Nobody is being protected from credit reporting companies, because they couldn't write it up right.
That's the problem with writing omnibus bills like this. Because they're not particularized, the experts in each field don't look at them properly, and we get this sort of nonsense. It is unfair to members on this side of the House, because it doesn't give us a chance to say: "On this we agree with you; you're doing something right for a change. And on this part of the bill you're doing something wrong." So I'm concerned when I see bills like this, and it's a habit the government should get out of.
I want to speak to just two or three points in this bill. In section 1 we talk about the British Columbia Endowment Fund Act, and we talk about "in perpetuity." It's a word I have trouble with, obviously, but I know what it means even if I can't say it. It means some time longer than two years, to most people. "In perpetuity" is a long time; it goes on forever. But just two short years ago we put this piece of legislation into place, and here it's gone again -- in two years.
We all know that this government only exists for four years in every 20-year segment, and I suppose "in perpetuity" for them is only about three or four years. The fact of the matter is that two years ago they thought this was going to go on forever. Here we have a new Finance minister and virtually a new government -- all but a couple ministers, but very definitely a new Finance minister. The new Finance minister is saying the last Finance minister didn't know what he was doing. Or if she isn't saying that, she is certainly saying that the government she used to be a member of in a different capacity has changed its point of view in two years. Are things changed so much every two years? I think that's a reason for all of us to be apprehensive about this bill.
As a matter of interest, the member for Peace River North, in passing, criticized or had a difference of opinion with our position on this bill. We don't think that particular section is right, and we're glad to see it go. We don't think the government should be in the private investment business. We think it is a dangerous precedent, for two reasons. Firstly, how do you choose which company to invest in without disadvantaging another company in the same line of business? In that respect, the fact that you're getting out of this is good. It makes for difficulty in the investment field when the government has a stake in any company. It adds an influence, a flavour, to that company's shares, and it makes people who want to invest in its shares nervous that the government might influence it or the company might influence the government.
The other reason we don't think the government should be in the investment business, and the reason we don't disagree with changing this particular section of this bill, is that we've had two or three illustrations of how the government can get in trouble. It might be a good investor. It might be taking the public's money and investing it wisely. In fact, to give it credit, it did invest it wisely; it did make money. However, it does influence other decisions that government makes -- or, if it doesn't, the public thinks it does. Consequently, I don't disagree with the fact that they are doing away with that particular part of the act. But I am surprised that they are throwing it out just two years after bringing it in.
A number of members have talked about section 4, with reference to the Energy Council. It's talking about the obvious when you ask why they created it in the first place and here they are taking it out again. Some members have mentioned that it was just a vehicle to prop up some NDP hacks who couldn't make it in an election or who needed to be rewarded. I wouldn't say that, but that is an inference. It could be that they wanted to look after the person running the organization for them -- the top gun who got a five-year contract and five years' pay for a two-year job -- but I wouldn't say that. I'm trying to be as gentle as I possibly can. The temptation is to get carried away on this particular section, because it's so obvious that the government is saying: "We blew it. We spent a whole bunch of the public's money on a commission that was obviously useless." In fact, it not only appears as if it didn't do very much, but the decisions that it did make were diametrically opposed to
[ Page 10005 ]
what was in the best interests of the public, whose tax dollars were being spent.
We're not sorry to see that go. I don't know whether any members of the.... Maybe I should refer to what the Minister of Finance said about it. What was the reason she wanted to get rid of the act? She said that it also repeals the Energy Council Act, which established the B.C. Energy Council, and: "The council was formed to bring more public input into the development of a long-range energy plan for the province and to report on specific issues." I guess it failed in that. If it didn't fail, if it was successful in that particular endeavour, it was a very costly way of doing it.
If the Minister of Finance wasn't in the House when the member for Matsqui was speaking on sections 7, 8 and 9, she should have been. If she wasn't, I would refer her to the Blues in the next couple of days. The points made from this sitting member of a school board were very pertinent to the debate. I would draw the attention of the Minister of Finance to them. He made his points very adequately.
Section 12 sticks in my particular craw for a couple of reasons, not the least of which is that we have a Special Accounts Appropriation and Control Act amendment, and what we're going to do is strike down the British Columbia Cultural Fund. We're going to take it out of the investment field that it was in, and we're no longer going to invest in culture through that method in this province. Generally speaking, I want to tell you that I approve of the government getting out of special accounts. Everything should be funded out of a general revenue account. That's the way government has been done for some time. Generally speaking, I think that's the best way to go. It doesn't matter how you raise the money. It's all an imposition on the public in the long run. Whether you call it licences, fees or taxes, it's all a tax and an imposition on the public. As a contradiction to that, I don't know how the government can say in one breath that they want to close this special account when at the same time they are running an organization called B.C. 21, is nothing less than a special account. They might call it a Crown corporation, but in actual fact it draws its breath and gets its life from a 1 percent tax on gas and a tax on car rentals. They call it a Crown corporation, but it is a special account with money raised and loans obtained by that method.
The general debt of the province is increased by that method to the point where the total debt is $27.4 billion. We never hear this government or any member from that side or the Minister of Finance talk about debt. They talk about the deficit this year, which is the current projected debt -- in actual fact, it's debt. This province owes $27 billion, and they're hiding it away in Crown corporations and special accounts like B.C. 21.
The money that they're spending on the Island Highway and on building schools, hospitals and roads is all borrowed. I don't mind if they do it, but I would like them to stop being so sanctimonious and stand up and admit it. The public debt in this province is $27 billion.
Hon. D. Miller: So you're opposed to it, eh?
C. Tanner: To $27 billion worth of debt? Yes, most certainly. Do you want to hear me say that I'm opposed to the Island Highway? I'm not ashamed of telling you that I don't think you should be borrowing money to the extent that you are. I'm not ashamed to tell you that you're inefficient. I'm not ashamed to tell them that you're talking about closing special accounts on one side of your mouth, and on the other side spending money like drunken sailors in another special account. I'm not ashamed of that, no.
What concerns me about section 12 of Bill 14 is the fact that we are doing away with a special account that raises money for culture. That makes me slightly nervous, because while they're still going to be spending money on culture, they're going to bring it in-house and have more government control over it. I would ask the Minister of Finance to refer to the way the Canada Council spends its money. Whether or not we agree with the decisions they make, the fact of the matter is that the Canada Council spends its money by a committee of well-known Canadians who make decisions on a provincial basis so that all Canadians can benefit from the largesse of the federal government. This government doesn't do that. This government has a committee that advises it, but it retains unto itself and its ministers and its deputy ministers the ability to refuse any loan or contribution or grant. If they were really candid in what they want to do, if they really wanted to make genuine grants, they would ask cultural committees to make decisions for them. They do neither one thing nor the other.
[4:30]
It will be my intention to vote against this bill for two reasons. Firstly, I don't like omnibus bills; I don't think they're a fair way to go. Secondly, while there are a couple of things that obviously should be done, like getting rid of the Endowment Fund and other parts of the act.... It's time that this government learned its lesson and brought these bills in individually so we could deal specifically with each part of the bill.
Hon. D. Miller: It's a pleasure to rise in this debate and support this piece of legislation. I must say that I'm rather appalled at the nattering nabobs of negativism on the other side of the House. All we hear is complaint after complaint. The fact that this government has reduced the operating deficit from almost $3 billion to below $1 billion, the fact that this government has frozen taxes....
Deputy Speaker: Excuse me, minister. A member rises on a point of order. I would caution him before rising on a point of order that if he is challenging something the member says as misrepresenting or not being true, that is not a point of order. Do you have a point of order?
R. Neufeld: Just a short one. I would like the member to go back to Peat Marwick and find out.
Deputy Speaker: I must hear a point of order, hon. member; otherwise I can't allow the interruption.
Hon. D. Miller: All of this is significant economic accomplishment: a massive reduction in the operating deficit, despite the fact that when we came to office we had to write off between $200 million and $300 million of bad debts from the previous administration. Talk about people who didn't know what to do with the public's money -- they gave away the public's money.
An Hon. Member: And what are you doing?
Hon. D. Miller: Taxes are frozen, the deficit is down, and we hear from members on the other side that they are opposed to projects in this province that put people back to work -- projects that create jobs. A member from the southern part of Vancouver Island, where, according to Statistics Canada the unemployment rate is only 6.9 percent, is complaining that we're actually creating jobs and that we have a vibrant economy in the southern portion of Vancouver Island.
[ Page 10006 ]
I am appalled at the constant whining and complaining about the very good performance of this government. If the members opposite wanted to be a little more constructive, instead of saying they're opposed to the Vancouver Island project -- a project that is long overdue, that has been a political football for I don't know how many years, that will provide a safe corridor of transportation up this island, and will provide jobs and employment for people on Vancouver Island.... I don't know why they're opposed to that project.
Why are they opposed to the construction of schools when we have significant problems in some areas of this province? These members stand up and say: "No more highways. No more schools. No more jobs." It is disturbing in the extreme. The opposition parties have an obligation to oppose, and I've never quarrelled with that. But they certainly have an obligation to try to offer reasonable alternatives -- constructive criticism.
To digress a moment, I hear the members complaining that we're doing things that they advocated. They're saying that they didn't like the Energy Council: "Do away with the Energy Council." When, after some review, that's one of the measures taken, they stand up and complain. It's disturbing that at some point in the future we will have to go to the people -- all of us, as individuals and as a government -- to ask for a vote of confidence. When we do that -- as governments, opposition parties and individuals -- it seems to me that we might have to stand for something. Instead of saying what we're opposed to, we might have to actually start talking about some constructive, new ideas -- instead of this constant nattering, as I described it. And I must say I think that quote is not original. If I'm not mistaken, a former member of this House, Mr. Nielsen -- who I ran into last night -- coined that phrase, "the nattering nabobs of negativism." But it has never been more appropriate, as I sit here and listen to these petty complaints.
Most shocking and appalling of all is their opposition to the construction of new highways, schools and colleges. Hon. Speaker, I want you to know and I'm prepared to reveal now that -- despite what we hear in this chamber -- it's true that quite often I meet with some of those members opposite, and I'm sure my colleagues do. And do you know what they're saying? "Would you please build that new highway or school in my constituency?" It seems to me that there's a bit of a contradiction here. You cannot come to the government on an individual basis and say, "We need this new highway, courthouse or school; please get on with it," and then have the luxury of standing up in this chamber and opposing all of the money we're going to spend on those projects. I think that's a bit of a double standard.
I must also counsel the members opposite that there is no shame in supporting good measures of the government. After an honest analysis, looking at the needs of your own constituents and determining that there is a need for new schools and highways, hon. members, there is no shame. No one will accuse you of not being an effective opposition if you simply stand up and say: "Yes, you are doing the right thing." In fact, if the members opposite would get off this negative track and look at the benefits that will accrue to British Columbians through the construction of this vital infrastructure, I'm sure that upon reflection they would indeed stand up and support the government's budget and these capital projects. Perhaps it would lend credence to their individual lobbying efforts, when they come to individual members of this cabinet and say: "Would you please build such and such in my constituency?" I've tried my best to convince the members opposite that they should really take a more analytical view. Certainly their duty is to oppose. But upon analysis, I would suggest that there really is no shame.... And they really should support this bill.
Deputy Speaker: The question is second reading on Bill 14. Seeing no other speakers, the minister closes debate.
Hon. E. Cull: That's a bit of a hard act to follow, I must say. But you know, I've been listening to this debate over the last day and a half, and I find it quite amazing that the opposition is opposed to a bill that is intended to pay down the debt, streamline government operations and provide greater accountability to the taxpayers in this province.
As the member before me said, we know that the role of the opposition is to oppose. But if all they do is oppose, oppose, oppose and criticize, criticize, criticize, they're not doing their job. Their job is also to recognize when we are doing the right things and to lend support to the things that are in the best interests of the people of this province. The funny thing about it -- when you look at it over the last couple of days -- is the inconsistency between what they say one day and what they say the next. They tell us to cut spending -- they criticize our spending. When we cut spending, they criticize us for cutting the spending. We say that we're going to cut spending and eliminate some of the agencies of government by winding up the responsibilities of the Energy Council -- something that they called for -- and what do they do? They criticize us for doing that.
Two years ago we set in place the Energy Council to do a job. It has done that job well, and now it's time to move on. This opposition is suggesting that we should never have done the job in the first place of developing a long-term energy strategy or looking at our exports; or maybe they are suggesting that once you've created a body you should leave it there forever. This government is not going to do that. We're going to be responsible, and we're going to cut spending where it makes sense.
They have asked for stable funding. They say that we should have stable funding for some of the important agencies of government, some of the important issues, and some of the important activities that take place in this province. And when we do it, they turn around and criticize us.
The Cultural Fund special account has not provided stable funding to the cultural community in this province. It's gone up and down, depending on what has happened with that special account and with interest rates. When we decide -- wisely and sensibly -- to eliminate that special account, provide greater accountability by making a voted appropriation in the Ministry of Small Business, Tourism and Culture, what does the opposition do? They criticize that again. So one day they call for stable funding, the next day they are opposed to stable funding. It's hard to keep pace with them.
They tell us that we should listen to what the people are saying. When we talk to the people in the education community -- trustees, teachers, parents and students -- they say: "We need greater accountability. We want to make sure administrative costs are as low as they can be. We want to make sure that money designated to deal with special needs education is targeted into those kids in the classroom." When we hear that and act on that by making it a requirement of our funding, what does the opposition do? They complain. They say we shouldn't do that. They don't want us to listen to what they call local autonomy. In one breath they're saying, "Listen to what the folks say," but in the other breath -- if we listen and respond -- they throw up some other principle that they think has a higher need
[ Page 10007 ]
This government cares about what happens in the schools in this province, and we are going to make sure that every dollar that goes to the school districts is spent in the most cost-effective way possible; that it does the greatest benefit for children in classrooms. That's what this legislation is all about.
Then they talk about debt. Not only are they inconsistent from one day to the next, they are inconsistent from one member to the next. The member for Saanich North and the Islands said we're spending too much on building schools, colleges, universities, highways and health care facilities, because every dollar we spend there adds to the debt. He said we shouldn't be doing that. Yesterday I listened with great interest to the member for Langley, who was complaining that we weren't spending enough on schools in her area. You can't have it both ways. This legislation is intended to keep the debt down.
[4:45]
We are winding up the B.C. Endowment Fund and providing over $600 million worth of assets to reduce our debt. It's very clear that when it comes to what this government is trying to achieve by bringing down the deficit 60 percent over the last three years, by cutting the rate of growth in spending from 12 percent to 3.5 percent this year and by making the important and necessary investments in this province's future, both in terms of highways, schools and health care facilities and in terms of the human capital in education, this opposition, as usual, is opposed, and they continue to be negative.
[The Speaker in the chair.]
The Budget Measures Implementation Act will provide the essential tools to implement the measures I introduced in our budget on March 22. As the people who have analyzed our budget have said, it will ensure that B.C. will have the lowest tax burden in Canada, the lowest debt and debt-servicing burden in Canada, and the best and highest quality of public services in Canada. With that, I move second reading of this bill.
Motion approved on the following division:
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YEAS -- 42 |
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Petter |
Pement |
Priddy |
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Edwards |
Cashore |
Zirnhelt |
|
Charbonneau |
O'Neill |
Garden |
|
Perry |
Hagen |
Dosanjh |
|
Hammell |
B. Jones |
Lortie |
|
Doyle |
Conroy |
Beattie |
|
Evans |
Janssen |
Pullinger |
|
Lovick |
Blencoe |
Barlee |
|
Ramsey |
MacPhail |
Clark |
|
Cull |
Smallwood |
Miller |
|
Streifel |
Simpson |
Sawicki |
|
Jackson |
Kasper |
Krog |
|
Brewin |
Copping |
Schreck |
|
Lali |
Hartley |
Boone |
|
NAYS -- 19 |
||
|
Chisholm |
Reid |
Farrell-Collins |
|
Stephens |
Weisgerber |
Hanson |
|
Serwa |
Mitchell |
Wilson |
|
Tyabji |
H. De Jong |
Neufeld |
|
Fox |
Symons |
K. Jones |
|
Warnke |
Anderson |
Jarvis |
| Tanner | ||
Bill 14, Budget Measures Implementation Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
H. Lali: I request leave to make a quick introduction.
Leave granted.
H. Lali: I notice in the gallery today Chief David Walken from the Cook's Ferry band in my riding. Would the House please make him welcome.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. A. Petter presented a message from His Honour the Administrator: a bill intituled BC Forest Renewal Act.
Hon. A. Petter: It is my pleasure to introduce Bill 32, the BC Forest Renewal Act. [Applause.]
An Hon. Member: You've got a lot of trained seals here.
The Speaker: Order, please.
An Hon. Member: Like Pavlov's dogs.
The Speaker: Order, hon. members.
Hon. A. Petter: The purpose of this act is to renew the forests of British Columbia, enhance the productive capacity and environmental value of forest lands, create jobs, provide training for forest workers and strengthen communities. For too long our forests have been taken for granted by governments. There's been too much taken and too little given back to the land. This act helps to change the way we manage our forests. Instead of an uncertain future with less wood and fewer jobs for British Columbians, this act will give back to the forests some of what has been taken away.
This act creates a new agency, Forest Renewal B.C., with representation from government, industry, workers, communities, first nations and environmentalists who, in partnership, will be responsible for managing investment in forest renewal. These will include investments in improving silviculture to ensure healthy, productive forests; investments in cleaning up environmental damage, including damaged rivers and streams and deteriorating logging roads; and investments in restocking and protecting fisheries, wildlife and other resources depleted in the past.
As well, there will be additional investments to get more value and jobs from each tree harvested. These will include assisting more value-added companies to start up, expand and develop new markets; providing new skills and training for forest workers to move into new job opportunities, forest renewal and value-added manufacturing; enhancing participation for first nations; and increasing economic development and diversification in our communities.
The Speaker: I would advise the hon. minister that his time for introducing the bill has expired.
Hon. A. Petter: I'll conclude by saying that with the introduction of this act, this government is taking an
[ Page 10008 ]
unprecedented step forward in creating a genuine long-term plan for sustaining and renewing B.C. forest lands. I move the bill be read a first time now. [Applause.]
The Speaker: Order, please.
Bill 32 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Hon. G. Clark: Hon. Speaker, I call second reading of Bill 11.
CEMETERY AND FUNERAL SERVICES AMENDMENT ACT, 1994
Hon. J. Smallwood: Bill 11 is a significant piece of consumer protection legislation. The death of a family member or friend is a particular time of loss and emotional turmoil. At this time the bereaved need clear information from qualified funeral professionals about the nature and costs of funeral arrangements. Consumers must be assured that a uniform level of quality care is available at all funeral homes operating in British Columbia. Bill 11 will achieve the objective of improved consumer protection by introducing a new system of licensing for funeral services professionals and corporations doing business in British Columbia.
[5:00]
Another important consumer safeguard in Bill 11 requires funeral homes to display the current price list of services and products available and to provide copies to consumers upon request. Bill 11 will not interfere with funeral arrangements which family members wish to provide for the deceased in their own homes, nor is Bill 11 expected to affect the various cultural and religious ceremonies observed in Canada -- provided they are conducted within the bounds of fair business practices as well as provincial health and safety standards.
Under Bill 11, the registrar of cemeteries and funeral services is given the power to determine whether licensing is in the public interest, having regard to matters such as the financial and professional suitability of the applicant, consumer protection, health and safety, and respect for the deceased. As well, the registrar is provided with the usual range of regulatory powers required to implement a licensing system. These powers include the powers to suspend, cancel or impose conditions of a licence, the power to request information from applicants and licensees and the power to investigate complaints in writing and through inspections.
British Columbia's funeral service industry also supports this licensing initiative. The industry has sought the introduction of occupational standards through licensing for some time. In fact, British Columbia is one of the last provinces in Canada to license funeral services professionals. Under Bill 11, the funeral providers, directors and embalmers will be licensed. The funeral providers are, for the most part, large corporations which exercise management and control over a number of funeral homes. Under Bill 11, the corporate funeral provider will provide a licence for each funeral home it operates in the province and must carry on business under the name specified in the licence. The funeral provider must ensure that licensed funeral professionals are available at each funeral home in British Columbia and must ensure that the premises are sufficient for the provision of funeral services.
In addition to licensing the major participants in the funeral services industry, Bill 11 includes other significant consumer protection measures. The funeral homes will now be required to display a current price list in a public area and to provide copies of the price list to consumers and the registrar. Consumers will be entitled to a refund of 80 percent of moneys paid into prepaid funeral service plans, exclusive of personalized or installed items, when they decide to cancel a prepaid service plan.
The funeral service industry has been voluntarily complying with this requirement for some time. Moneys received from consumers through prepaid funeral service plans must now be placed in a trust account within 21 days of being received from the consumer, instead of the existing 60-day requirement. Under the act, cemetery operators and funeral providers will be required to produce financial records upon the request of the registrar. The registrar will also have expanded emergency powers to order a cemetery operator, funeral provider or third party to refrain from dealing with assets and to seek a court order for the appointment of a receiver.
Bill 11 also respects the interests of applicants and licensees. The registrar must provide an applicant or licensee with written reasons for an adverse decision -- refusing to grant or renew a licence, suspending or cancelling a licence, or imposing conditions on a licence. The applicant or licensee has the opportunity to make a written reply to the registrar within 21 days of receiving an adverse decision and has the right to appeal the decision of the registrar to the Commercial Appeals Commission.
In an effort to streamline the delivery of government services, Bill 11 will abolish the Cemetery and Funeral Services Advisory Council. However, continuing discussions with the industry through the cemetery and funeral services consultation group will assist with the development of regulations under Bill 11 to set specific occupational and building standards. The remaining measures of Bill 11 enhance administrative efficiency under the existing Cemetery and Funeral Services Act by creating a registrar's list of licensees, expanding the power of the Lieutenant-Governor-in-Council to prescribe regulations, and preserving the confidentiality of information acquired under the act.
In summary, Bill 11 will provide consumer protection in the marketplace for funeral services in British Columbia. It will establish standards for funeral services professionals and corporations, provide accessible information regarding the price of products and services, and ensure a uniform level of care is available throughout the province. Bill 11 will provide a measure of comfort to British Columbians who are dealing with the loss of a family member or friend.
V. Anderson: I rise to speak on the Cemetery and Funeral Services Amendment Act and would say that generally we are in favour of the bill. In committee, though, we will want to get some clarification.
By way of introduction, I might say that I have some personal experience in the area. In my student years I spent some time working in a funeral home myself, and in my years as a minister I spent much time working with the professionals who are the directors of the funeral homes across the country. I want to affirm the professional manner in which these persons have worked, in all relationships I have ever had with them and on every occasion. They are one of the professions with which we in the ministry work on a most regular and weekly basis. I know, from their point of view, that they are happy for the clarity of the regulations that come before us, so that not only the public but also the funeral directors themselves will have clarity in these
[ Page 10009 ]
undertakings. I expect, though, there may be some questions on the intention of individual parts of the bill, as we go through the clauses one by one.
It is true that we need to have regulations and standards. One of the concerns I will bring up at a later date is the effect this bill may have in small, independent communities in out-of-the-way places. I know the minister mentioned that many of the funeral homes are now run by large companies, and that is probably true of the majority at this particular time. They have their own standards and requirements. But my own personal experience over the years has been that with the small community funeral homes, where the funeral director is a member of the community and a personal friend of all those served, there are situations and requirements significantly different from those of the larger urban situations. I trust there may be enough flexibility within the regulations that come forward to take care of those particular undertakings.
I question, just in passing, the one-year registration. It seems to me that we need to streamline ourselves so we're not having to repeat ourselves on such a short-term basis. One year is a very short time in our activities. In this day and age I think there are ways of streamlining that, without having that particular demand coming upon us in that short a time.
One of the things that may come to the fore in due course -- which is not in the bill itself, but which will come out of regulation -- is the question of the fees that go with the licensing. These fees can be very damaging, depending on their nature. Again I think particularly of the small operator, not the large operator, where there will be one-time fees -- whether they'll be tied into a certain kind of operation or the number of services held by that operator in a given year. We trust these things will be taken into account, as we deal with the variety of operators which can be found throughout the province.
I'm generally happy, though, with the regulations here before us. One of the things probably covered in other parts of the act, but that perhaps also needs to be quizzed as we go through -- it's in the Cemetery and Funeral Services Act -- is the relationship, in some cases, between cemeteries, funeral directors, crematoriums and other services provided in relationship to the funeral experience. The kind of counselling provided is very important and significant; and the kinds of requirements you like to be licensed are not clearly spelled out and are left, again, for the regulations of the act to bring forward.
Although protection of privacy is claimed within the regulations here before us, when one is required to give a copy of one's records if a complaint is brought forward, that may have to be examined in a little more detail.
I agree with reducing the days from 60 to 21, in regard to the funds that are in trust when things are cancelled or when the arrangements that people have made are being changed.
We might ask some questions during the committee stage about why the Cemetery and Funeral Services Advisory Council was cancelled, and what is put in its place to maintain the contact and interaction between government regulators, government planning, and the future growth and changes that take place in any industry, including this one.
Those are my main concerns, finally, in regulations: what they will be, what the costs and fees will be, and how free or limiting these may be as the regulations come forward. We'll probably have to deal with them after the fact rather than before the fact.
[5:15]
D. Symons: I agree with my colleague -- in general, I'm very pleased to see the bill come forward. I think the people of this province do need consumer protection, and this is brought forward that way.
I'm not too sure, actually, whether the funeral services given in this province have been done in such a manner that this should take precedence in Consumer Services. It seems some of the home repair businesses and what not get in the papers quite frequently for what I would call some shady business practices, particularly with the elderly. I would have hoped that the ministry would attack these things first, because they seem to be a greater concern to a larger number of people. But if there are any providers of funeral services that aren't behaving in a straightforward manner, this bill will help to bring them in line. I don't believe there are many, but it's good to have it written this way. It's all spelled out and everyone knows how it's going.
There are, however, a few things that I have concerns with. I thought I might just alert the minister to them in second reading so she can explain why my concerns are unfounded when we get into committee stage, and if there is something to my concerns, they might amend the bill and save us some time at third reading.
Most of my concerns are with section 11. It deals with funeral directors and embalmers. They are expected to employ or contract with a licensed funeral director for each location. I'm just wondering whether a service that takes place in a church would count as a location and if it would be necessary to have an embalmer at the church when a service is taking place. When it mentions each location, I'm not sure whether this might be done in more remote communities. A funeral home may do the embalming and have what they call the slumber room and other accoutrements of the business in one location. They may not want to open a large business for the convenience of people in another community when they could simply operate a chapel there and perform the services on the deceased at their larger location, transporting the body to the community where the person died for the actual service. Would the way this act is worded entail having to have those people at the second location as well? I don't think that is the minister's intention, but it could be interpreted that way.
There are a few other areas where some things need clarifying, but I thank the minister for bringing this bill forward.
Hon. J. Smallwood: I'd like to simply thank the members for their comments and questions. We certainly will be prepared to address their issues during committee stage of the bill. Mr. Speaker, at this time I take pleasure in moving second reading of Bill 11.
Motion approved.
Bill 11, Cemetery and Funeral Services Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
G. Brewin moved adjournment of the House.
Motion approved.
The House adjourned at 5:19 p.m.
[ Page 10010 ]
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 2:56 p.m.
ESTIMATES: MINISTRY OF ENERGY, MINES AND PETROLEUM RESOURCES
On vote 25: minister's office, $333,000.
Hon. A. Edwards: I would like to make a few introductory remarks to give a little context to what goes on in these estimates, which I believe represent one of the ministries that gives truly good service to this government. I would like to begin by acknowledging the dedicated support of the staff who are with me today.
On my right is the deputy minister who is facing her first estimates, Brenda Eaton. You will know my ADM for energy, Peter Ostergaard; the director of revenue and operational services, Joan Hesketh; the senior financial officer, Jennifer Smith -- I know she's important; I always forget the term for it -- and the ADM for minerals, Bruce McRae. I would also like to acknowledge the fine work over the past year -- as in previous years and into the next year -- by the ministry staff, who certainly provide great service to the province.
This year our budget had to meet four needs, including the overall need to build on sound fiscal management and to create jobs. We saw very clearly -- and said so in the budget -- the need to manage wisely and to cut duplication and waste. As well, we saw the different needs of industry. Not only did we recognize the needs of B.C.'s forest industry, which is the primary one and the one inevitably noticed, but we also saw that there were needs for the mineral industry. We looked at our coal, electricity and gas industries as part of what we see as the need to revitalize our economy and proceed in British Columbia on a healthy, firm footing.
We also saw the long-term need for sustainability; that is a continuing issue with this government. We see that sustainability as including environmental protection. We see energy efficiency and conservation as part of that sustainability goal, and we see that we clearly need very fair and predictable policies in order to achieve those goals.
I want to talk a bit about the blue book and how we can look at it. I'm sure some things will emerge as questions or matters of interest to members of the Legislature. We're basically looking at vote 25, which I moved today, through to vote 29, plus a special account and a financing transaction for the Vancouver Island gas pipeline.
The number of full-time-equivalents is virtually unchanged. It's 408, compared to 405 last year. My office vote is virtually unchanged at $333,000. The overall ministry operations this year are at $60.8 million, and that shows a decrease of about $3 million compared to last year. In broad terms -- and I'll certainly be pleased to answer questions on the narrower details later -- there is a decrease of $9 million from the successful renegotiation of the Vancouver Island pipeline agreement. There is an increase of $5 million in targeted expenditures under the mineral development agreement and our incentives for prospecting and exploration. There is a further increase of $1 million to represent subsurface resources. These are both energy and minerals in local and regional land use planning, which is an activity, as we all know, that is going on at very high levels across the province.
[3:00]
Before we go further into estimates, I want to mention the successful renegotiation which has resulted in the signing of a memorandum of understanding on the Vancouver Island pipeline agreement with the companies involved. This is an example of our sound fiscal management, because overall we've achieved a total net saving this year of $19 million over last year.
If you look at the revenue picture in the blue book, you'll see that there's no doubt at all about the importance of the petroleum and mineral sectors, which bring in the dollars to support our government programs. We are predicting this year an overall total of nearly $400 million. The details of these revenue forecasts reflect the condition of the industries. In the oil and gas industry, we see a booming industry, and we expect that boom will continue. Revenue from oil and gas will bring in more than $358 million, because companies have significantly bolstered their land acquisitions over the past year. The bidding and the monthly sales of oil and gas rights will certainly be down from last year's high levels. Although the royalty revenue and that kind of thing will be up, the companies did a lot of land-buying last year, and we expect that those totals will not be as high this year.
The forecast for mineral revenue certainly reflects our government's decision to take significant action to help the industry, and we want to make sure that it works toward achieving its true potential. We do expect, therefore, a drop of about 40 percent in revenues from the mineral tax so that it will probably be about $30 million this year rather than the $50 million it was last year.
We would hate to think that anyone thought this drop was because the bottom had fallen out of mineral production; it hasn't at all. The drop is due to the tax cuts we brought in on budget day. We believe these cuts will save jobs at marginal operations and improve our competitiveness, and will therefore bring new jobs and new investment into B.C.
The ministry collects petroleum and mineral revenues, and I want to highlight very good achievement on the part of our small but effective audit group. They continually inspect and verify the returns, and as a result brought in about $12 million extra last year. That was at a cost in salaries and overheads of only about $800,000, and that's very good. I'm always pleased when we can report a 15-to-1 ratio of income to expenditure.
The energy sector is a very exciting one. The gas industry is beginning to say much more frequently and publicly what we've been saying for a while, which is that B.C.'s northeast is really the centre of excitement for exploration on the North American continent. The oil and gas sector is certainly booming in the northeast right now, and our engineering field office is overseeing the strongest drilling season since the 1970s. That is truly good news. The high activity is occurring because, after ten years when gas supply exceeded demand, last fall the contracts began to see the supply-demand equation come into balance. That sparked very strong activity. It sparked investment and a general lift in the sense of what was happening and what was about to happen in the industry and in the region. It also, of course, caused a quick increase in gas prices at the burner tip, which we expect will be a one-time shift. It responded to that longtime trough in gas prices. The new prices keep gas as the cheapest fuel available to B.C. consumers and maintain our very fortunate position, compared to other parts of Canada
[ Page 10011 ]
and to most parts of the United States, where we have very competitive natural gas prices.
For the coming fiscal year our major energy programs will remain in the forefront so that we can create new jobs, investment and regional development, and so that we can continue to protect the environment and use our resources to our best advantage on a broad scale of considerations.
In the policy area, we are going to maintain sound policies for independent power production and the possibility of exports while we move forward on integrated resource planning. I believe we're really quite far forward in our integrated resource planning. It's an issue that hasn't even been taken up in some areas, and I think we are leaders in that activity. The Columbia River area will continue as the scene of major regional attention, partly combined with our negotiations with the United States on entitlement from the downstream benefits.
We certainly want to continue to achieve greater energy efficiency and conservation. The budget again offered tax relief on solar energy products. That is a positive sign, and it's also of very practical value in helping a fast-growing industry continue moving into the mainstream -- particularly in some of the areas outside the major urban centres, where the industry often has small roots but hasn't yet been able to grow that cover, if you like, which allows it to be very successful in the mainstream. In this fiscal year we will also continue to save energy and to have a positive impact on our environment through our energy management programs. We have a very proud record here. This province is well ahead in Canada and internationally, in terms of what we've been doing to save energy. We've done it without a lot of staff or spending, whether we wanted to or not. We haven't had that much staff or that much ability to spend on these programs, but we have done it anyway because it's important.
We have had a lot of cooperation with other ministries and with utilities. A good example is B.C. Hydro and its Power Smart program. We've had cooperation with appliance manufacturers, with the building industry and with environmental groups. This year we plan to continue setting higher levels under the Energy Efficiency Act.
We are working at better, even greater improvements to the Building Code, and we are working with utilities and others on conservation programs and continued good planning -- the kinds of things that allow us to achieve a goal, if we have one.
Vote 29 is earmarked for resource revenue sharing agreements with first nations. For some years there has been an agreement with the Fort Nelson Indian band whereby we share our oil and gas revenues from production on that band's land. Last year this put about $300,000 into the band's bank account. This year we hope to see other agreements with other bands, so that we can share the benefits from energy development on a similar basis.
To reduce the size of government and to avoid duplication, two specialized agencies in the energy area will be disbanded. The announcement has been made: the B.C. Petroleum Corporation and the B.C. Energy Council will be disbanded. I'd certainly like to recognize the efforts and contributions of the staff and the people who work with those agencies. The B.C. Petroleum Corporation has a 20-year history of extremely efficient work and contribution to the provincial government. The Energy Council's history, of course, is much shorter, but each of them has contributed a significant amount to the province. As I said, that should be fully recognized. There is no implication in our move to disband these two agencies that their work was not excellent or that what they did was not well appreciated and valuable. We will be taking steps to assist each of these agencies' employees with placement elsewhere in the public service.
I want to turn now to the mineral sector, and of course, there was very good news in the budget for the mineral sector this year -- for the mining industry, for the companies and workers, and for more than 25 communities whose futures are very closely tied to mining. It may not be the only industry in those communities, but mining is a significant part of the economy in those communities.
We recognized last year that we had a troubled industry, and it was very clear that there was not enough exploration and development work going on to replace mines. But it is the nature of mines to eventually deplete their resources. The strategy, of course, pulled no punches. We agreed with some disturbing findings and came back with an action plan, which was an important part of the mineral strategy. Not only did we establish where we were and the mood of the industry, the province and the country, but we also had a strategy for doing something about it. The three directions we would look to are: enhancing exploration, improving competitiveness and increasing our value-added in the province. Certainly this budget contributes to our ability to achieve those three goals.
The budgets for the ministry and the revenue measures announced on budget day make up a package that addresses all stages of the mining process, from grass-roots exploration to development and continuation of a mine. We have even seen that there are items that will help close down a mine; that, of course, is part of the cycle, whether we like it or not. It would be nice if they went on forever, wouldn't it? So over the next five years -- and this is a strategy we have announced in the budget, although this year's expenditures on.... The value to the industry this year -- they won't be all expenditures; some of it is forgone taxes -- is $18 million; over five years it will be $100 million. It's going to definitely bring jobs to the sector. It's going to be very valuable for the communities involved, and it will be very valuable for people who work within the industry and provide that expertise we boast about from time to time. It gives parity for our hard-pressed coal industry. Of course, that is something I am particularly pleased about because of my interest in coal. It boosts the industrial minerals sector, where value-added possibilities are definitely waiting for those who have the initiative and the reason to go ahead and develop the markets.
[3:15]
It reactivates spending under the federal-provincial mineral development agreement. We have programs for geoscience and mineral potential; we have value-added in export promotion and for training the prospectors of tomorrow. It will, as well, do its best to ensure that we are talking to the public and making sure that the value of the industry is recognized by the people who work within it and outside it. Within the ministry's operational budget this year, we are going to be able to put new resources to work on land management issues, on mineral tenure improvements, and on permits and approvals. We are also going to continue to develop the autonomy of our regional offices. We established three regional offices, and there are now three regional managers. They are going to help speed up the bureaucratic process as it originates in the regions and help make decisions that reflect regional needs and regional idiosyncrasies.
There are definite signs that the industry is rebounding, and I see, as others see and are commenting on, a significantly increased measure of confidence and optimism among the people who work in the minerals industry. Based
[ Page 10012 ]
on our information, we are predicting that exploration spending this year will be up by between 15 and 20 percent. Since last summer we have been working on major new projects that represent $1 billion in new investments for British Columbia. Just ten days ago we gave a certificate to Eskay Creek, and that project has already moved ahead. That one will be a $75 million investment and will provide approximately 100 jobs, and it's very exciting to know it's going ahead.
In the coming months and years, as we look back, I'm sure that we're going to see this year as the year that the industry turned around. It's pretty exciting to be in that kind of turnaround. I believe that the ministry is quite ready to work with the industry, communities and others in the province to make sure that it rebounds even more than it would without our assistance.
So basically, those are the background feelings and moods that I would like to relate before we begin to debate the figures in the blue book. It's now time to get to the detail and what I have to say. What we have here, I believe, contributes to those feelings and that interpretation.
The Chair: Thank you, hon. minister, and now we're open for debate.
D. Jarvis: I'll just make a few brief comments to start with about what the minister says. She's definitely right that the only excitement in the industry now is in the energy field. That's more or less what I'll concentrate on in the first part of my questioning.
Nothing, as far as I'm concerned, has really been done in the mineral field for quite a long time, and although the budget did show a few things that were of some help, there is nothing significant for major development in the future. In regard to minerals rebounding, I would say it's more like a glacial progress.
In any event, I would like to just ask a few brief questions on the estimates supplement. To start, the agreement with the Fort Nelson band is up by a quarter of a million dollars. You said you expect other agreements with other areas. Can you name those areas for us?
Hon. A. Edwards: The one that we're currently working on is for the Blueberry and Doig Indian bands.
D. Jarvis: In the supplemental blue book, in section 80 under grants, you say it's down by $9 million. Is that from the Vancouver Island pipeline? Is that the big difference?
Hon. A. Edwards: It is basically a reduction of $9 million, which is the.... The deemed grant that we have is the difference.... Since we have negotiated a change in the Vigas agreement, there is expected to be a much smaller payment into the RSF. Because of that we are paying much less interest.
Pardon me, there is a payment which offsets the difference in interest. The forgone interest that we have to the company.... The company pays it at a rate that is lower than the market rate. I'm not sure I should be going into this in great detail or I'll get us both all fouled up here. It's the difference between the interest that we pay under the rate that the government grants and what we would have to pay under market rates. That is a deemed grant, and that's $9 million.
D. Jarvis: Is the whole $18 million in grants going to the Vancouver Island pipeline? How does that break down?
Hon. A. Edwards: I haven't got the full answer, but I can tell you that it's a bookkeeping entry. The $18 million, for that part of it, is a bookkeeping entry. The amount that we started with was $9 million, and that is in here. I'm not actually sure how we should describe this. The actual disbursement will appear in the books under the financing transaction, under the fund. This is the amount of interest. It is a grant, and it is $9 million lower than last year.
D. Jarvis: The new Explore B.C. program, the $15 million: where does that show up?
Hon. A. Edwards: The program is a three-year program for $15 million, but as I've announced, it's only $4 million this year. That $4 million shows up under STOB 82, and that's very close to where the $18 million was that we were talking about before. But the bottom line -- the next STOB, and that's where it shows up -- is for all the mineral development agreement, and the exploration incentives are in that.
D. Jarvis: Is that the $4 million that you didn't have to pay last year?
Hon. A. Edwards: No, this is new money this year to enhance, initiate and encourage exploration, and also money that we're putting into the mineral development agreement. We didn't put money in last year; we are putting money in this year, and this is new money.
D. Jarvis: I've written down some information on gas, and I want to get into that aspect of it, according to your supply requirements forecast from 1993 to 2015. The first question I've written down is this. The price per gigajoule of electricity will remain flat, you say, for the next 20-year period -- that's in constant '92 dollars I assume -- between 1995 and 2015. Does the minister have any basis for making such a forecast? Or is it dependent on the government's announcement that the rates will always sort of track inflation?
Hon. A. Edwards: Yes, we put these things out, but I don't have them at my fingertips right now.
D. Jarvis: You don't read them.
Hon. A. Edwards: Of course I read them. I find them my best reading material, and I'm pleased to hear that you're reading them too.
The basis for our projections -- on page 11 under the field prices -- is that there will be a rising gas demand, but it will be combined with a reduction in excess supply and a greater dependence on high-cost reserves. This will create some upward pressure on prices over the forecast period. Prices in natural gas are negotiated, of course, so they're highly variable and depend on the time of year, type of sale, length of contract and negotiating skills of the people doing them. Our current forecast is that they will grow at an average real rate of 3.7 percent from 1992 to 2015, but there is certainly a wide probability range around the forecast. We recognize very clearly that there are some trends that are changing people's use of fuels, so we are going to be keeping a very close eye on that and keeping our forecast very current.
[3:30]
D. Jarvis: What is the basis for staying with the report? What is the basis for assuming that the price of natural gas at
[ Page 10013 ]
the burner tip will increase by 39 percent in the same time period?
Hon. A. Edwards: I don't know where you get the figure of 39 percent, but it could involve a number of things. I wonder if you could clarify for me whether we're talking about the difference in real dollars or nominal dollars.
D. Jarvis: No, in terms of 1992 dollars.
Hon. A. Edwards: In 1992 dollars, we may be making the difference between field prices and actual final price to the consumer. For example, our field prices right now are approximately $2 a gigajoule, but then you have to put in your distribution and transmission costs. And when you do that, the price to the consumer is approximately $6 a gigajoule. I don't know what your 39 percent is, but there are certainly many factors in calculating a price. It could be in that particular equation as well.
D. Jarvis: I want to know the basis for assuming the price of this natural gas in the field. I believe the book says it will increase by 83 percent during the same period. With the assumption that the gas price will stay.... How do you base that?
Hon. A. Edwards: I haven't been able to identify what "the same period" is. What period are you talking about?
D. Jarvis: This period of 1993 to 2015 that you quote in the book.
Hon. A. Edwards: The retail gas prices over the forecast period -- that's the same period -- are projected to increase in real terms by an average of 1.6 percent annually. Maybe that's the figure you're talking about. Maybe if you add it up, it gets to what you are projecting. The annual increase would be 1.6 percent anyway; I have no idea what it adds up to. I haven't done that. Over 23 years that would be about 39 percent, and presumably that 39 percent would be 1.6 percent annually.
D. Jarvis: If the price of the product in the field is going to go up by 83 percent, and the price to the customer is going to go up by only about 39 percent, where is the difference being made up?
Hon. A. Edwards: There obviously have to be some adjustments in the margins for the transmission and distribution. If our projections are correct, and if our estimates say that's the kind of increase you have in the price of the gas -- and there's a difference between the retail price and the field price -- the reductions, the variations or the accommodations are going to have to come in the other two components of the price to the retail customer. Those are the transmission area and the distribution area.
D. Jarvis: Are you saying that the distributing utilities are expected to realize their productivity and conduct their operations in a sort of lower way than the inflated costs of the product?
Hon. A. Edwards: I presume you're asking if the utilities are going to have to carry the difference totally themselves.
D. Jarvis: Yes.
Hon. A. Edwards: May I remind the member that natural gas prices to the consumer are regulated by the utilities commissions. In B.C. and in Canada the gas cost is negotiated between individual producers and utilities. Then the transmission costs are regulated by the National Energy Board. Each utility charges for distribution. The first one is the cost of the gas, which is negotiated. The second one is the transmission cost, which is regulated by the National Energy Board. The third component of that price factor is each utility's charges, which are regulated by the B.C. Utilities Commission.
The Utilities Commission will continue, as it has always done, to scrutinize utility rates to ensure that they're just, fair and reasonable. I would suggest there is a system that has a number of checks and balances. The goal of the system is to ensure that there is a fair, just and reasonable price for people who provide the services; and that the producer has the choice of selling or not selling through a negotiating process with the utilities -- which are the distributors, in essence.
D. Jarvis: I'm just wondering why the ministry would not expect similar efficiency in the electricity field. Why would electricity be expected to track inflation and gas utilities have to do better than inflation to keep up?
Hon. A. Edwards: We're obviously having a bit of a discussion here to find out what you are addressing. Are you addressing the fact that gas and hydro rates...? If you are suggesting that one of them will track inflation and another one won't, I don't think that's correct. I think they will both track inflation, and our projections are that they will follow approximately the rate of inflation that will be continuing. There is no reason to suppose that they wouldn't. There is no reason to suppose that they would be wildly.... As far as I know, we don't see any future fluctuations for any particular year. It's a fairly regular growth. It's 2.3 percent for electricity increases and, as I said, 1.6 percent for gas. That's what our projections are.
D. Jarvis: Are you saying that the projected inflation for electricity is only 2.8 percent? Is that what is now before the Utilities Commission?
Hon. A. Edwards: The 2.8 percent increase is for this year -- and again, there are various components to the pricing of your electricity, your energy, at the door. What we expect in the coming years for electricity, in real terms, is a 1 percent increase in the cost. I think that's relatively comparative. I don't know how far off any.... It's in the kind of payment terms that we're doing: what you pay now and what you're increased to -- those are the terms. I don't know how comparative it is in terms of gigajoules or anything.
D. Jarvis: It appears that electricity.... You know, when they want an increase, they get an increase. Already this year, it's not been just the 2.8 percent that they're applying for now; a 3.9 percent was passed for this year already. Are you saying that the 3.9 percent has been passed, there's a 2.8 percent before the Utilities Commission, and there'll be a further increase after that this year?
Hon. A. Edwards: If I said that, it was a mistake. What Hydro has put before the Utilities Commission is what is going to be reviewed, and that will be for this year. Let me see if I can put it a different way so that we can compare the same things instead of things that are different. The 1993 rate
[ Page 10014 ]
increase was 3.9 percent, and they've been granted an interim rate increase of 2.8 percent from April 1 this year. The Utilities Commission has not yet reviewed those rates. So that's where we stand for last year and this year so far, but we don't know if the 2.8 percent increase will be approved. It may have to be returned.
D. Jarvis: Your same forecast indicates that the demands, or the possibility of demands, for electricity in the U.S. and Pacific Northwest area.... The increased demand for B.C. natural gas in this area is going to be about 15 percent to 25 percent. I'm going to read this out -- I wrote it out because it's mathematics, and I'm not that great at it. So assuming it is in the middle, the 20 percent range, the ministry is looking for an increase of....
Hon. A. Edwards: Would you clarify what it is that's in the middle of that range?
D. Jarvis: The demands. I'm following the forecast in the same book....
The Chair: Members of the committee, a minor formality in this House is that you do your business through the Chair as opposed to directly across. That's part of my role. Thank you.
D. Jarvis: Yes, through the Chair. So your forecast, through the supply and requirements forecast for 1993 to 2015, stated that there would be a possibility of a demand increase for electricity in the U.S. and Pacific Northwest area of about 15 to 25 percent. Assuming it is in the middle range of 20 percent -- let's take the average -- the ministry is looking for an increase of gas exports in the neighbourhood of 45 petajoules per year. So if we take last year's prices, or let's say 1992 prices -- because that was all that was available to me -- that was a price assumption around $4.98 per gigajoule at the burner tip. That represents new exports to the tune of about $224 million per year. However, if that gas was converted to electricity on this side of the border -- and I assume you know what I'm getting at -- and if we assume the use of combined-cycle gas turbines with an efficiency of about 50 percent and we use the 1992 assumption of $17.84 as a burning-tip price for electricity, the annual increased revenue to the British Columbia economy would be in excess of $175 million.
[3:45]
What I'm trying to get at is added value, and why the added value of this would be a benefit to all British Columbians. I'll have you answer that question -- and see if my mathematics are correct.
Hon. A. Edwards: The hon. member suggests, I believe, that we might be getting more money if we took all the gas that we export to the U.S. and turned it into electricity before we exported and sold it at the rate that we think we could sell it for. I'm not sure that that includes any transmission costs or anything. We certainly see that if there is an appropriate place to generate electricity and to export it, we could well do better, and that it is a value-added issue. Nevertheless, you can't take every gigajoule of gas that you put across the border and turn it into electricity, as the member will know.
We have been working hard at co-gen plants. The ones we have going so far are up in the middle of the province at Taylor and Williams Lake. We are looking to open more co-gen plants, and certainly have done a whole lot of work on the Alberta Natural Gas proposal at Crowsnest. In many cases, with the right team and with the right kind of deal, we could do very well at that, and we're expecting to see that kind of thing happen under our export policy, and I hope that that will happen.
Certainly we have opened the door for private sector initiatives in this area, and we have gone further now and we're working.... As you know, ANG has signed a contract with B.C. Hydro's Powerex for Powerex to look for markets for the ANG electricity that they could generate at that plant, which would probably be very competitively priced and comparatively environmentally sound.
We are encouraging that kind of thing to happen. I agree with you that it would work well where it does prove out, where we don't have too many transmission losses and where we can work through B.C. Powerex with storage accommodations that go along with the grid. We believe that there are big opportunities there, but that, of course, is yet to be put into place -- any of them that would take that advantage. We do see that as an opportunity, and we're hoping that the private sector will come up with more proposals and that we'll be able to work with them to achieve some better economic return for our energy.
D. Jarvis: I assume from that, then, that you are considering creating more jobs in British Columbia -- rather than employing Americans -- by creating all the technical work and building the generation stations, etc., in British Columbia. Is there a plan to do that?
Hon. A. Edwards: Yes. I certainly would like to review for the member all our work toward getting an export policy, and agreement from the people of the province, that under certain circumstances we should be exporting electricity. That was a major task of the Energy Council. They circulated the province, they talked to people, and they said this is what we see could happen. They put out papers; they informed the public; they also heard from the public and took in the feeling of the public. They eventually came to the conclusion, which they recommended to me, that we should have an export policy for electricity. That being the case, we have established an export policy for electricity. We have ensured that independent power producers can work within that policy as well as B.C. Hydro -- or other utilities, as long as those utilities have made clear that they will be able to supply their consumers.
Certainly the market will determine the type of generating resource -- and just to lay out some of the parameters as to what will happen under that policy, I refer to our long term firm export policy for electricity, which was dated July 1993. The market will determine the type of generating resource that may be brought forward for provincial project and export certification, with the exception that any new projects with unacceptable impacts will not be considered, and unacceptable projects will be identified early in the project review process. That kind of thing would be a megaproject -- for example, a huge dam that had the kind of environmental impacts such that you could see right away the people of British Columbia would not want to develop it in order to export electricity.
Nevertheless, there was considerable enthusiasm for some kinds of electricity projects, such as wood waste generation, which we believe could happen here. If we can find a deal to export that electricity, that will happen. Nevertheless, there are some projects -- I can think of one particular example where there was a proposal for a cogenerating plant just across the border.... It was not going to be built anywhere but at that plant. And because it wasn't going to be built anywhere but at that plant, it was either
[ Page 10015 ]
going to go ahead or it wasn't going to go ahead. I signed an export permit for the gas to go to supply that co-gen plant. We would rather have been able to generate the power here, but they already had an operating plant. They wanted to add the component for the cogeneration of electricity, and in that case it made some sense to approve the export policy for the amount of gas.
D. Jarvis: In calculating the forecast demands for gas, did your ministry take into account the efforts of the B.C. Utilities Commission to coerce the customers to use less gas, in effect by directing homeowners to be charged twice as much in the winter months as in the summer?
Hon. A. Edwards: I find it interesting that the member suggests that the Utilities Commission is coercing customers to be able, in fact, to address some of the real costs in the delivery of gas. All of the other jurisdictions use a winter-summer rates structure, and industrial customers certainly have to do this. They do reflect the real costs of consumption at different times of the day or year. It allows consumers also to be able to look at that, and try to take advantage of those kinds of differences in rates to change their consumption patterns, therefore being able to save not only money but also perhaps on their use of gas. Certainly, the seasonal rates will lead to lower rates for all consumers in the long run because they improve the profitability of investments in efficiency. That has been proven where they are in effect, and it's a very forward-thinking move on the part of the Utilities Commission. Seasonal rates are revenue-neutral, so that an average customer on an annual billing plan will experience no change in their annual bill, unless they choose to take advantage of the possibility of using the difference to their own advantage.
They also, by the way, increase industrial competitiveness because they allow the utility that buys the gas to buy at times that are more advantageous to the utility. Every deal they make is reviewed by the Utilities Commission, so there's no difference there. The Utilities Commission is going to know what the utility pays for the gas. There is no opportunity for that gain to escape the benefit of the consumer.
D. Jarvis: That's all very well, but you saw the exchange of correspondence between me and the chairman of the Utilities Commission. He did say that he was clearly sending a message to the consumers that they are using too much gas and that he wanted them to reduce their consumption. He felt that the direct message would occur if he instructed them to charge twice as much in the winter as they did in the summer.
B.C. Gas, in another application to the B.C. Utilities Commission, suggested that this wasn't the proper way to do it. The poor old pensioner with his heater -- and it gets cold in the winter -- was paying twice as much for his gas, while ministers like yourself, with great big swimming pools, got a break in the summertime. Do you really think it's fair that the person with the swimming pool, who pays half as much for heating their swimming pool in the summer, should be able to do that, whereas the little old pensioner or anyone else on a fixed income pays twice as much for heating in the winter? It's a real world out there, minister.
Hon. A. Edwards: The member has a great way of adding little add-ons to what he has to say, and I don't know where he got the idea that I have a swimming pool -- or that I could afford a swimming pool. It's very interesting.
However, I took his initial word, which was "coercion," and.... I think that's really quite different from sending a message to consumers. The chair of the Utilities Commission and the panel he chaired for that particular hearing were very willing to send a message to consumers. It fits in with what we believe and what we find general public support for, and that is conservation of energy and that we have to find ways to conserve our energy. It doesn't matter that gas is relatively abundant in B.C.; it still needs to be conserved, as any energy does. That is exactly what the chair of the Utilities Commission was attempting to do: send a message that it's important that we conserve energy.
He also made very clear that over a full year the average consumer will be paying the same amount for their gas. It was a revenue-neutral move, and therefore it gives people the opportunity and incentive to save in certain seasons, because it will give them a faster return if they want to invest in some kind of energy-saving furnace or heater. It will bring them a return much sooner, without putting somebody at a particular disadvantage on a year-round basis.
[4:00]
So it's a direction that is very much in tune with what I believe the public believes in, and that is that we should be conserving energy. It's a pricing signal to customers to allow them to begin to conserve energy. They can then choose, for example, to save energy by buying an appliance which will allow them to use less energy in the season when the cost is higher. You can't deny that is a good thing. Adequate pricing signals over the broad customer base will definitely encourage energy conservation. That goes along with this government's energy efficiency regulations, and these too are helping to lower energy use and consumer costs.
We put in energy efficiency standards in 1993 which will cut energy costs by more than 20 percent over the 1992 standards. Working together to make those kinds of furnaces and other appliances available and putting in the incentive in the pricing structure, you have a strong, very healthy and necessary incentive to conserve energy.
D. Jarvis: Perhaps coercion wasn't the right word, then. He just bloody well told them that's what they were going to do. The chairman of the B.C. Utilities Commission admitted that it was going to cost the people more money. In the example that I gave you -- the fixed-income or the pension....
The Chair: I will have to interrupt. There's a vote being called in the main House, and we will recess for a few moments to take in that vote. We will then return here to complete our tasks.
The committee recessed at 4:02 p.m.
The committee resumed at 4:06 p.m.
D. Jarvis: I will see if I can pick up where I was.
The realization is that they can't be revenue-neutral when an old age pensioner is using a space heater to heat himself only in the wintertime. Where does the revenue-neutral aspect come in when he doesn't use the natural gas heater in the summertime? In any event, I don't know where you are getting your figures that the majority of the people out there are in support of this. The increase in gas and everything is costing more money. All these hidden taxes are coming in. If this next increase for electricity goes through in the next little while, it will put in excess of 24 percent on energy bills, which have gone up in this province since last November. There's no way you can call that a neutral way of paying for
[ Page 10016 ]
energy in this province. The question of.... No, I'll leave that and go in some other direction.
Does the minister have the budget for the Utilities Commission? Are you prepared to answer some questions on it? All right, thank you. Could the minister provide the budget for the Utilities Commission for the past three fiscal years in sufficient detail that we can see where they are making their greatest efforts?
Hon. A. Edwards: First of all, I find it....
Interjection.
Hon. A. Edwards: I'm going to hold the floor, thank you.
Interjection.
The Chair: One at a time here.
Hon. A. Edwards: I would like to mention to the member that we get a great deal of input in this ministry, in my office, in my constituency and as I go across the province, saying that people support the conservation of energy. That is very clear, and I am amazed that the member suggests that it is not a good idea to conserve energy. That's what he said, and I find it an interesting political position. I would certainly encourage him, through the goodness of my heart, to change his position, because I think it's one that will not stand him in good stead. However, whatever the member would like to do....
It's on that basis that a lot of the activities in this ministry and in the Utilities Commission are happening. In fact, the Utilities Commission also believes in the conservation of energy in a way that protects the consumer. That's largely why we have these changes that are coming. They will save our energy resources over the longer term. We are the highest per capita users of energy in the world -- certainly for electricity. It's an issue that I believe needed addressing, and we have tried to address it. Overall, the actual cost of energy to any individual is lower than it was by a significant amount and lower than it was in real dollars 18 or 20 years ago, or over a period of time.... Let's take 18 to 20 years and say it's significantly lower now than it was then if you take into account the real dollars.
You moved on to the Utilities Commission and asked exactly where.... You will find what figures we have on the Utilities Commission on pages 108 and 109 in the blue book. There are a number of things I could point out, but I would prefer to wait for the member to ask specific questions on those figures. You did ask what the Utilities Commission is putting its greatest efforts into, and I would say that it's putting a lot of effort into the kinds of directions that will allow us to regulate the utilities and ensure that the consumer is getting a good deal at the same time that we work toward ensuring that we have conservation of energy in this province. It's an overriding need and requirement, I believe, and we put a lot of time into it.
Nevertheless, the commission is working hard at integrated resource planning and working with utilities toward a process or structure that we can use, one that will work relatively well on a comparative basis from energy to energy, but also work well for utilities: when they decide that they are going to supply a demand, they have a direction to go and guidelines to use when they decide the kind of supply option they are going to choose. The chair of the commission and other members of the commission have been working on that. There have been a number of rate hearings, and I think the Utilities Commission is as busy as it has been for years and years. That includes its regular work as well as the special assignment we gave it for the Kemano completion project.
D. Jarvis: I think it probably wasn't very fair of me to ask you about the budget of the B.C. Utilities Commission. I was trying to get at the costs to the commission that were charged out. How were they charged out and to which utilities, and what does each utility have to pay in proportion? That's what I was looking at, but I wasn't finished. I just wanted to go onto the last statement, when we got interrupted and all the rest of it.
The chairman of the B.C. Utilities Commission has, in writing, extensively said -- and has said to me personally -- that if he can send a message to the people of British Columbia that they're using too much gas and the emissions are going up in the air, if he can send the message to them not to use as much gas in order to have one or two days of blue sky up there, so be it; they'll have to pay for it. This chairman does not have the right to do that as far as I'm concerned, because there would be no public input for him to make a social experiment like that, using the people of British Columbia. That's what I was going to say before.
Hon. A. Edwards: I find your interpretations of what the chair of the Utilities Commission should do very interesting. The chair of the Utilities Commission is there within a broad, general government policy to see that the utilities respond to their consumers for the best possible public policy. It has been made very clear by this government that good public policy involves conservation of energy. I would be interested to know if you disagree with that as good public policy. Certainly, the chair of the commission does a lot of work with public input. As a matter of fact, the chair and the members of the panel spend a lot of time listening to people make presentations. The commission itself reads presentations, makes sure it knows what the people involved think of what they're planning to do and gives the technical basis for the broader decisions that the panels make.
In the case of public input, you asked, first of all: where does the money to the Utilities Commission come from? The budget is set by agreement with the ministry, the ministry takes it to Treasury Board and it comes out in the budget. This year's budget will be $4.42 million. That is up from last year. The Utilities Commission recovers its basic costs from utilities, and that's on a very fair prorated basis. I believe the basis is the number of customers that each utility has. I'm sorry -- gross utility sales is the basis. Each utility is assessed to pay for the operation of the B.C. Utilities Commission. When the commission goes into a hearing on a particular project or a particular rate base, then the proponent is charged back for approved costs. The budget that we see here is largely for the operations of the Utilities Commission.
Beyond that, this government has brought in participant assistance with rules -- tight guidelines -- but with the ability for assistance by government and by some of its agencies to support people to make presentations. There is a significant part of that budget this year for the Kemano completion hearings. There will be $600,000 for participant assistance for Kemano completion and $100,000 for incremental operating costs -- that's legal costs for hearings.
[4:15]
The budget will go up and down for the Utilities Commission and it will depend a whole lot on what issues are out there, what projects are out there, what concerns there are about rates and things such as that. It is a
[ Page 10017 ]
commission that responds to events and needs. We attempt to keep the Utilities Commission quite within control; it's not so huge a commission that when there is not much to do, there are people sitting around with nothing to do. We have a small commission, and they try to deal with the expansions when they need to do that.
D. Jarvis: When you say the measurement, are you referring to the number of houses that each utility services? Is that the measurement figure?
Hon. A. Edwards: The levy is a rate, and there are two rates under two different orders. I'm sure we can get you the detail if you need it. It's per $1 of total gross utility energy sales for the two previous calendar years. They say calendar years; that's interesting. They're collected during fiscal years, but it is the calendar years they use for the basis of the levy.
D. Jarvis: Could the minister please try to explain to me -- and say whether she agrees with it -- the mains-extension test. We'll wait for Mr. Ostergaard to come forward, because he's probably the only one around who knows anything about it.
Hon. A. Edwards: How much do you need?
D. Jarvis: The majority of it.
The Chair: The member might want to watch his assumptions just a little.
D. Jarvis: That's what he's there for.
Hon. A. Edwards: Basically, the policy is for uneconomic extensions to gas lines. From time to time in this province there have been subsidies for that, if these mains were going to go ahead, because there is a certain limit to what the utilities are allowed to do. Gas utilities are expected, under their regulation, to be able to recover the cost of a gas main -- of their actual main, not their connections -- within a period of five years. Under the formula they have for their return, including investment -- and those things are regulated by the Utilities Commission -- they could not extend mains to a place where they could not recover the capital investment within five years. That, as I say, was what happened, until the most recent rate hearing, at which the Utilities Commission -- the panel -- made a ruling which is much more stringent than that previous test, which allowed the company to put forward any kind of financing activity that allowed them to recover their investment in five years.
B.C. Gas Utility Ltd. estimates that will have an impact on probably about 6,000 customers who would otherwise have been able to make an arrangement to receive service over the next three years. Even before the Utilities Commission made its decision, we were working with regional districts on ways we could allow people who lived in areas that were uneconomic in terms of regulatory authority to finance the amount they needed to get the extension.
It began with the Regional District of Fraser-Fort George. They developed a way they could borrow the money under a vote, and they could then assess that money back from the people in that particular area. Under those circumstances, B.C. Gas and other utilities were allowed to extend their main, even though it was uneconomic under the other terms that were regularly there.
We have also reached an agreement under the Canada-British Columbia Infrastructure Works program that will give us leeway to approve some projects that might allow us to extend gas mains. As you know, 85 percent of the funds under that program are committed to water, sewers and roads, but there is 15 percent left available for projects. These projects, of course, would be distributed throughout the province, so they have some good payback. The program here would provide for a total investment of $675 million over two years, with federal, provincial and local shares of one-third each; each level would have to put up $225 million. It might be very useful to be able to use this program to fund not only gas but also electrical grids in some places, if they prove to be able to come in under the requirements for doing that.
I have worked fairly extensively with several communities to try to get an extension where it is uneconomic under the general terms, and there are a number of options. People who are there sometimes have to work hard at coming to agreement for one of those options, but they are available if they choose to work as a community to have that happen.
D. Jarvis: Seeing we have only a few more minutes, maybe I could ask just a couple of brief questions. On oil and gas, how much of the gas that we produce in British Columbia is exported?
Hon. A. Edwards: We export approximately half of our gas, and that proportion is rising. When we came into power in 1991, it was just under half. It's now up over half and may be approaching 60 percent. The amount that we exported in 1993 was 361 petajoules, and 296 petajoules was the domestic amount. That compares to 283 for export and 270 for domestic in 1992 and 269 for export and 258 for domestic in 1991. The year before that it was the other way around: we had more domestic use than export use.
D. Jarvis: I assume we do not import any gas from Alberta -- or any of that.
I got a copy of a letter some time ago -- whether it was true or not, I'm not sure -- regarding the delivery of gas to the East Kootenays. It was just north of you, in Hosmer, where the ranchers were complaining about the way they are going to be charged for their gas, pending the new line going through. Were you aware of that situation? I'm sorry, I don't even have their names, but there were quite a few of them. They were complaining that the parcel tax, in proportion to the size of their land versus someone on a small acreage or a small lot.... They would, for example, be paying the same amount, or more. If their house was situated on two parcels they'd be paying twice as much as the single parcel down the road that was owned by a trailer court, where the gas going into that trailer court was in fact supplying 50 trailers with gas.
Hon. A. Edwards: Yes, I do know a lot about this. I met with people from Hosmer, and they are proceeding, by the way.... Many people argued that they didn't like the parcel approach to taxation that the regional district would use in order to finance the extension.
It is not an issue that the government can deal with. The regional district has the choice. They could tax by frontage, which they took a look at. The regional district said that would be absolutely unfair because then people with big ranches would be paying huge amounts compared to what people with trailer courts would pay.
The other option was assessed value, which again gave an inequity. The parcel approach also gives an inequity because
[ Page 10018 ]
some people hold up to five parcels, for example, and may only ever use them as ranch property, whereas someone else may decide to.... So there are some inequities in the parcel approach, and I have certainly encouraged the residents in my constituency to work with the regional district. I have encouraged the regional district to try and find an imaginative way to do it. I'm not sure that right now they have, but they have agreed to decide by petition whether or not they will have a referendum. If the petition succeeds, they will then go to a referendum on the parcel-based tax.
I can see the inequities of that process. It's within the municipal system and the regional district's choice of how they would levy the amount. So it's been difficult. It's an issue that I think has to be resolved with the regional district.
Having given that answer, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 4:29 p.m.
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